If Iceland was considered such a wasteland,
why did the Vikings want it for themselves?

Iceland was not considered as a wasteland by the Vikings that settled in, but the name was given on purpose so that they avoid competition for it.

Explanation:

The Vikings were the first people to reach Iceland. They traveled from their homeland in Scandinavia into the unknown ocean water and eventually managed to reach a large island. Once they got to the island, they made it their base, but also sent expeditions further west, reaching Greenland, and even the North American mainland.

Being aware that there are other groups of Vikings waiting to set sail westward, the first group decided to trick them in order to get better land for themselves. This was done by naming the two large islands they discovered. The green and much more suitable for a living have been named Iceland, while the one covered with ice and much harsher was named Greenland. This made the later groups of Vikings think that Greenland is the better option and they got tricked. Iceland was not a wasteland by any means. It had a lot of timber, freshwater, and an abundance of fish and marine mammals as a food source.