The problem is that no one knows if their story is a “waste of an app” as you say.
Unlike a lottery where everyone has an equal, extremely remote chance, college admissions to top schools is all about humans (adcoms) being influenced and persuaded by an applicants unique and compelling application, essays, ECs, interview, balanced against the colleges institutional needs and since not one application is exactly identical to the other, something in the app might trigger an acceptance.
IMO, if you have the stats to be competitive and have researched the college to make sure it’s a good fit (academically, financially, and socially), why not give it your best shot and apply. These kids work so hard in high school (and really since middle school/elementary school) they should take a shot at a reach college or two. The application fee is relatively small compared to the total cost of college and if it really is a hardship, they can wave the fee.
The bigger issue to me is that kids don’t do their own detailed research on colleges and apply to every Ivy League college and other top 20s without understanding which ones are the best for fit them.