Why won’t Apple Store repair my iPad Air M1?

For practical purposes, in lieu of repairing and returning your own iPad, Apple usually exchange the iPad for a renewed/refurbished iPad of the same model and specification. The cost of the exchange is the same as would otherwise be charged for repair. Unless you have benefit of an active AppleCare plan, an out-of-warranty repair while expensive will be somewhat less than the cost of a replacement iPad.

As for out-of-warranty repair costs, Apple offers a fixed-price price repair. You can verify eligibility and cost for your region/country here:

iPad Repair & Service - Apple Support

If you have an active AppleCare+ plan, the cost of repair is reduced to a small excess/deductible fee.

From what you are telling us, they will repair a M1 iPad Air – but since your machine is out of warranty and has no extended warranty coverage, you would have to pay for the repair.

It sounds as if the repair they have in mind is replacing the entire keyboard – and, perhaps, other parts that might be glued to it.

Unlike iPhone, for which Apple does offer an in-store battery replacement service, iPads are treated differently...

iPads are considerably more difficult to open for servicing and repairs - and are returned to Apple's servicing centre. Due to long wait-times, Apple offers the exchange service to expedite the process to same-day where a replacement device is available in-store, or just a few days if a service replacement must be ordered. Otherwise, if your own iPad were to be repaired/serviced, you may be without your iPad for many weeks (or longer).

Be assured, whether your own iPad is repaired and returned, or you accept a service replacement, the cost to you is the same.

Sorry. Got confused there for a moment.