Even being somewhat aware of this parents make the tradeoff.
Imagine if cigarettes didn't have an age limit and while smoking your kids were calm, quiet, and easier to manage. What tradeoffs would parents have made? I'd guess a lot more of us would have respiratory issues.
I wouldn't doubt there's a correlation between screen time and socio-economics. Having more money gives parents a choice. They can provide more enriching activities, hire a nanny, spend time directly with their children, n things that are viable alternatives to an iPad that a family with less may not have access to.