The thing is - it's not supposed to.
I own both an iPad Pro and a MBA and each of them does their own thing very well. For example, when I need to set exam papers or plan relief for absent staff (via google docs), I work on my laptop. When I am teaching in class, I typically default to my iPad unless there is a task which requires a laptop. When I am lounging on the sofa, it's my iPad that I reach for when I want to unwind with a game of slay the spire, or quickly review some lesson material.
Each of them has its place, I know when to use each, and I would be very sad if I had to end up choosing one over the other.
This feels more like a developer issue, since there aren't really any stock macOS apps that maximise the M1 chip anyways. Though maybe Apple does share some of the blame for devaluing iOS apps to the point where it seems harder and harder to create a sustainable business model for mobile apps without going IAPs or subscription-based.
Sure, there's now FCP for the iPad, but how many people are going to use it, much less use it in a serious capacity over a laptop or Mac Studio?