All the CMs are quite similar to regular Pi boards, just with optional on-board storage and in a form factor that lends itself to smaller integration. They are mostly used for industrial purposes or at least for people who can make their own PCBs.
Remember, that image above shows the CM0 soldered onto a generic IO board, which is only used as a demonstration platform for what (and how) can be done with the CM0.
The CM0 is only that small PCB soldered on top of it.
That form factor is much better for industrial purposes than the original Zeroes because it's smaller, contains storage (so no finnicky, easy to break SD cart that you need to factor into the cost as well) and the castellated holes are much easier to solder automatically or at scale than through holes. And easier to route connections to and from as well.
Also the CM0, like the other CMs doesn't contain its own power regulation because it expects that the carrier project already has its own power management, thus reducing the efficiency penalty of doubled up power management.
If you don't know what to do with the CM, then it's not for you. But if you do know what to do with it, it's one amazing device.
One thing I would want to make with this is a tiny, super slim handheld computer with a keyboard or a small, slim emulation handheld.
Edit: Tbh, I don't think this could get much smaller, at least not with the ICs they are using. Sure, it would be amazing to have a Pico-form-factor device with pico power consumption and Pi5 performance for €5, but at least for now that are some quite unrealistic targets. Maybe wait another 15 years for that.