"How many M1 mac will still be functional in 20 years?"

Probably quite a few, MacBooks have had soldered SSD's for over 10 years now. My 2018 McBook Pro still has a perfectly functioning SSD. I still see people using 2015 and older MacBooks all the time. There is no widespread SSD failure issue after 10+ years of Apple soldering the SSD's.

For most people the SSD's are lasting longer than the useful life of the device.

The reality is most 8GB M1 Macs are still working just fine 6 years later. Power users know they need more than 8GB of RAM and will buy a MacBook Air or Pro with 16GB+.

The MacBook neo is for students, grandparents, travel, etc.

Hell, even if it dies after 6 years it was still a better experience than using a $500-600 windows PC and the cost comes out to ~$8/month spread over 6 years.

You originally stated "Also there are countless reports of bricked M1 8GB MacBook Airs that are bricked because the SSD used up it's write cycles"

Do you have a source for these "countless bricked SSD's"?

Apple has been soldering the SSD into MacBooks for over 10 years now, and most 10 year old MacBooks still have a working SSD.

I replied to somebody else earlier, but the 11" air and the new neo are very close in physical size.

The 11" MacBook Air was 11.8" x 7.56" the neo is 11.71" x 8.12".