My sentiment was that if a company is losing money consistently and egregiously, they are on borrowed time and a borrowed dime in very real terms as the trajectory is towards 0 - but the context is largely psychological. To your point, waste is waste. I agree wasting cash generated from profits is equivalent to wasting it from earnings.
I'd insist there is some practically relevant difference in there though.
Wasting money during a trajectory to bankruptcy creates a narrative of negligence that accelerates failure, while wasting it during a consistently profitable trajectory seems like sub-optimal management. The kind of thing that is theoretically identical, but in the real world of behavioral economics, the former seems more certain due to how easily the trajectory to failure can be estimated. The latter creates a weak narrative because of hidden information - nobody will ever know what "could have been" and so can never quantify how sub-optimal the management was.
E.g. nobody is dragging GE executives out of retirement/the grave to answer for long-term effects of sub-optimal management, and further nobody could prove at the time it was sub-optimal, only hypothesize. On the other hand, everything Elon Musk does at Tesla is torn apart and front page news, because they have a trajectory towards failure a high school student could easily calculate.
So "management's responsibility" to optimally allocate capital is sound in theory, but in the real world of imperfect and outright unknowable information, nobody ever really knows what optimal is. Sub-optimal comes to be expected as normal, but accelerating a trend towards failure is a powerful defining narrative. Somehow this matters.
Put it this way: gravity turns space dust into supernovas. Dust is just ever so slightly attracted to other dust, so it accumulates and accumulates, and eventually it becomes so massive that it forms a star.
The theory that firms should beat the market makes money gravitational. A shareholder who beats the market will get more money than other shareholders. Now they have more money that they can use to invest in other market beating schemes, etc. If whether a firm beats the market is random, then some investors will win and some will lose but it all balances out. But if beating the market is not random (and how could it be totally random?) then those with the most money can invest in the best firms faster and more easily than smaller investors and crowd them out. Remember that companies only have a finite number of shares, so not everyone can invest in a winner. If there's even a slight bias towards having more money making it easier to beat the market, then eventually you will get a supernova.
We all understand this on some level. Why is insider trading illegal? Because it makes it trivial to beat the market!
Worker-owned firms are a great idea, but if that's the only ownership model then you lose some ability to diversify your investments. Everyone's 401k goes poof.
Thinking through this, what are the alternatives? Simple cash reserves are out (because most societies can't seem to shake the tendency towards inflation). Bank savings accounts are a good idea, although impractical in our current society because interest rates are so low.
I totally agree with everything you're saying. But I'm going to quibble with your phrasing. Apple's cash reserves belong to the shareholders just as much as Uber's funding rounds.
Too many CEOs operate under the mistaken belief that retained earnings is "play money" in the way that paid-in-capital is not. For investors, retained earnings are subject to the same opportunity cost of capital as funds raised by equity or debt.
Its management's responsibility to deliver returns exceeding the firm's weighted-average cost of capital. If they can't do that, then they should return capital to the shareholders, who can then use it an alternative higher-returning venture.