We can observe Potential Temperature ( θ ) in nature.
From hiking in the mountains, we know that it's cooler when we go up. Snow falls on the tops of the mountains first. Etc.
But we also know that warm air should generally rise because it's less dense.
And this is where Potential Temperature comes in. If you were to bring that mountain air down to the surface pressure, it would expand, the added pressure on it would warm it. The mountain air would be WARMER than the other air at the surface.
Thus the atmosphere is stacked how you believe it should be. With less dense ( higher potential temp) air on top of more dense ( lower potential temp) air.