It’s not a waste at all. The extra computing power allows them to get much better performance than previous model OR the same performance with half the power use. That’s pretty important in a mobile device.

It isn't a waste if people buy it. Putting M4s in the iPad lets them market it to rubes who think bigger number is better without reading the spec sheet or understanding their own requirements, and if they're already manufacturing M4s to put in other things, that's one less production line that needs to run. Sure, they could release an iPad Cheapass Edition with an M1 in it and sell it comfortably at a profit for like $80, but the market for those is likely to be small, they won't make nearly the overhead profit that the M4 iPad will, it requires an entire extra production line setup, and most importantly it isn't flashy enough for Apple. They don't want to release a product that feels cheap, even if it was specifically intended to be cheap. It's bad brand optics and they care about that a lot. Let China sell a bunch of bootleg tablets to people that want them, they're gonna do that anyway regardless if Apple gets in the train or not, and this way Apple isn't tarnishing their product lineup with a PoorPad^TM