Economy of scale.
The M1 and any functionally equivalent "bespoke iPad Pro" processor that Apple would produce would be required to work in similar power/thermal budget and would yield roughly equivalent performance.
Why build another SOC that does the same things when the M1 would fit and provide the performance required?
Should they have just slapped an A14X badge on the M1? Because running a different production line for a marginally different processor that does the same stuff in the same/similar TDP would be pretty stupid.
You will likely find that due to the less efficient cooling, they may have clocked the m1 slightly lower in the iPad Pro vs. say a MacBook Pro 13", but the silicon is flexible enough to cover both products.
Economy of scale (stuffing the same SOC into multiple products) is how Apple is going to keep the cost of their product line down whilst delivering killer performance in the specific thermal/power budgets they hit.
I can't imagine the whining when the new Mac Pro perhaps comes with 4-8 M1 SOCs (or very close derivatives) onboard for 32-64 cores in a tightly integrated package. The recent M1 (not an M2, etc.) iMac confirms IMHO that this is where things are going. Apple is going to use the M1 package like lego bricks, much the same as AMD does with Ryzen chiplets. M1 is going to be milked for a while yet.
Maybe swapping out the local DRAM on the M1 packages for HBM2 (for on package super fast RAM as sort of an L4 cache) and then giving the user slots for bulk memory.
Intel/AMD does exactly the same thing - they only have typically 2-3 different designs for a given CPU generation and binning for performance/defect rate is how they get multiple models. They don't have different lines for the i3/i5/i7. It's just binning based on how well the end products work.
Apple is doing this too with the 7 vs. 8 GPU core options, and the iPad Pro is likely getting the best performing silicon they can produce; in order to run within the heavily constrained power/thermal budget inside the totally passive cooled iPad enclosure. The base MBA will get the worst silicon with some defective GPUs, the MacBook Pro 13" and MBA 8 GPU core variants will get the bulk of the "OK" cores.
edit:
And yes, I fully expect macOS and iPadOS for the Pro machines at least to start seeing a lot of cross over. The signs are there. Same SOC, similar RAM/storage capacities and a first party trackpad/keyboard combo. You don't need to be a genius to see where things are going. The iPad isn't going to kill the Mac. It's going to become a Mac. And vice versa. As more and more legacy stuff is ripped out of macOS (first Carbon and PPC, then 32 bit intel support, then shifting the Mac to M1, etc.), this is becoming increasingly trivial to implement.
It would very much not surprise me to see the exact same Mac/iPad applications for M1 including both user interfaces in the same app bundle at some point, and even iPadOS and macOS being merged to the point that the UI just shifts depending on whether or not a keyboard and trackpad is attached. Largely the same code is running underneath. Maybe a "macOS light" for the iPad when the trackpad/keyboard is connected.
This is where I see Apple winning vs. microsoft with the surface. Rather than forcing the same UI on both products, the backend application code will run the same on both platforms and the UI is just replaced depending on the platform. The fact that its all mostly swift/objc objects/classes in the back end with similar programming API for both UIs should make it fairly easy to do.
vs. the total disaster that is win32 application programming.
Apple is going to achieve what Microsoft tried and failed to achieve with Windows 8 onward, because they went about it with sound and long term engineering decisions and a 10+ year plan, rather than saddling desktop users with a mobile UI that a huge portion of their user base despised.
Apple has clearly had a plan. Microsoft? On end user devices at least - not so much. So much back-pedalling.
And yeah... anyone who thinks they will be DUAL BOOTING anything apple manufactured isn't paying attention. They can do this stuff without a reboot. You'll attach a keyboard and bam... you'll be in macOS with your applications STILL RUNNING most likely. Unplug and you'll transparently be switched back to the iPad UI. Same apps running. This will obviously only work for apps that include both UIs, but as above I think that's going to happen.
Oh and re: Craig saying "No" to merging macOS and iOS - times change. As do strategies and public announcements. Apple crapped on intel processors for years.... before making products with them.
Take any apple statements made by their staff with a pinch of salt - if there's a significant time elapsed since they were made. I agree with one of the posters above - I don't think you'll see iOS and macOS merge. They'll both be replaced with something like AppleOS.