Because we need economy of scale and we are also facing PAF on another front. When you have 1000 you won't have them all operating but most of them will be operational and the rest would be undergoing maintenance and repair. If you have 1000, you will only have about 750-800 planes in working order and the rest are in maintenance and repair. And you have to consider wartime losses and peacetime operational losses.
Look at USAF. It produced over 2200 F-16s for its own use and lost about 650 jets throughout the years and had about 1253 jets left in 2007. Now it is down to 841 F-16 jets.
And besides China may not have 1000 J10C right now but you can bet your bottom ass that they will get there and well over 1000.
The USAF alone has more than 800 F-16s, that is more than 3 times the number of Su-30MKI that the IAF operates, do you understand the difference between the USAF & IAF? What you are saying is entirely possible, of course we can order 1000s of Tejas, another 100 flankers and whatever you have on your wish list but there is a roadblock to your fantasy: "Money/Budget constraints!"
Have you checked how much the US spends on its armed forces as compared to India? The US's defence budget is more than 8 - 10 times more than that of India, ideally to have more purchasing power, we need to have more wealth and of course an increased defence budget, and how is this going to be possible? When our economy grows stronger. Besides our main adversary is China, we have a geographic advantage too in the region bordering China as far as fire power is concerned, this is if China would be the aggressor.
In war, it's not always necessary that your inventory be as large as your enemy's, even if you have 1/2 or 3/4th of your enemy's numbers, you can still put up a fight and win with good strategy and planning. In the case of PAF and PLAAF, there is no need to have as many aircrafts as them in order to go toe to toe with them. We need to invest more in ADS, and we are doing just that in conjunction to increasing our airforce's size. We need more long range air defences such as the S-400s, I think we are working on an indigenous Indian Analogue of the S-400.
This decade has many things in store for us, Russia invaded Ukraine, Israel and Hamas are at war, soon China may attack Taiwan, afterwards they may attack India and a full scale war may break out between the two nations.