It does not. For a typical cable you will have the two wires inside: "hot" wire and "neautral". To connect switches you would use the same two-wired cable, only hot and neautral wires would change their roles depending how the switches are set.
It does waste wire. The run of cable from power source to the first switch will only use the "hot" wire. The neutral wire will not be connected. The run from the second switch can have its neutral wire used, but unless there happens to be a good path to ground at the point of the second switch, there will need to be more cable run for that path to path to ground.
So assuming strictly 2-wire only cable, there will always be waste. Fortunately for the world someone long ago noticed this, and they sell spools of wire. These spools of wire and electrical conduit are used by electricians to great advantage for keeping wasted wires to a minimum. (Also, it is arguably safer to have no runs of "unused" wire just sitting there, because of potential for mistaken "bare hots" or accidental misuses of the wire causing shorts and fires and whatnot).
The wires in the switching system are not exactly hot and neutral; they are hot and disconnected. Neutral is connected to the mains (mains has two connections, hot is the high voltage connection, and neutral is the connection at around zero). In this case the wire between the bulb and mains is neutral, the disconnected wires between switches are, well, disconnected.
