I would guess Apple’s goal is increasing the number of people buying recurring Apple services, such as icloud and tv+.
It has been a long time since people have needed cutting edge laptops, so an M1 bought today will still work for 90% of people for the next 5+ years. Even if Apple doesn’t earn a large profit margin on the sale of the laptop, they could earn a decent amount on monthly services revenue, plus increased odds of that person buying a watch/airpods/phone/etc.
For what purposes will the RAM and storage not hold up?
I see most people around me watching media, using a web browser to shop, maps, look at photos/videos (small storage is great for Apple, then more people buy icloud), fill out pdfs, and maybe some email or light excel.
Presumably, those are the people likely to buy a laptop at Walmart.
Storage can at least be expanded externally, if at a cost of speed, reliability, and convenience.
For the RAM, 8GB is not enough, but in fairness, when the system can page out at 200GB/s, paging out doesn't hurt nearly as bad. Its only when things have to thrash the page file that it becomes readily apparent on these (say, an application needs to have more than a few GB of stuff resident in memory all the time).
It has been a long time since people have needed cutting edge laptops, so an M1 bought today will still work for 90% of people for the next 5+ years. Even if Apple doesn’t earn a large profit margin on the sale of the laptop, they could earn a decent amount on monthly services revenue, plus increased odds of that person buying a watch/airpods/phone/etc.