I've also wondered why they chose to drop to two E cores.  It seems like there's often enough work for them to do, they're so profoundly efficient compared to P cores, and they're so tiny.
The topic comes up at about 24:25 in this interview with Tim Millet and Tom Boger (Apple VPs), and they mention something interesting:
	
	
		
			
				
			
			
				
				We're joined by Apple VPs Tom Boger and Tim Millet to discuss Apple's chip-design philosophy and how it factored into the company's first high-end Mac chips, the M1 Pro and M1 Max.
				
					
						
							 
						
					
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According to Tim, the top end of the E core's perf/Watt curve (max performance and power) has some overlap with the bottom end of the P core's curve, so spilling some "E" type tasks to P cores isn't so bad.  (unstated: as long as the P core stays at the bottom end of its clock range!)
I don't think this is the whole story.  Everyone Apple sends out to do post-launch interviews has clearly been put through a lot of interview prep; they're very slick about funneling the conversation towards positive things which promote the product while avoiding saying anything in negative terms.  But this does help explain why E cores ended up on the chopping block.  Perhaps there was a desperate need to reclaim a bit of area because some other block was over budget and they didn't want to grow the total die size.  It's simple triage at that point: find something which users won't miss a lot, and remove it.
I'd still rather have four E cores and a (very) slightly larger die.  They're cool!  Literally and figuratively.