Is the git storage model wasteful?

Actually not. There is a good article describing the advantage of git: http://web.archive.org/web/20110902055701/http://whygitisbetterthanx.com:80/

Git does compress stored files with with zlib and it also packs them for a more efficient storage.

Git will eventually pack everything into delta-compressed archives during the regular course of its internal maintenance, at which point this is no longer an issue.

This isn't really an issue today though. Git's philosophy is that disk space is cheap, and it's better optimize for speed rather than storage efficiency. Chances are you'll be better served by a SCM which is twice as fast, as opposed to one which requires half the disk space.

See the Git Book's chapter on The Packfile as well as git repack and git-pack-objects.