The Gunners striker, who was snapped up from Lyon in the summer, has been a regular starter this term.
However, he’s been repeatedly hauled off in the second-half of games and has only managed to play a full match once.
Cascarino says it’s a sign Wenger doesn’t trust the France international.
He told The Times: “Arsenal have made a huge investment on Lacazette, spending £44m to sign him from Lyons in the summer, yet Arsene Wenger doesn't seem sure about him.
“The France striker has played 90 minutes once in the league this season, in the opening game against Leicester City.
“Since then he has played: 78mins, 28, 75, 66, 83, 71, 68. “That will be rocking his confidence.
“He scored a brilliant goal away to Stoke that was disallowed and Wenger immediately hauled him off.
“I don't believe he would have done that to someone like Thierry Henry, a striker who he trusted to produce the goods.
“They spend all that money and he is being treated like a squad player.”
Arsenal slumped to a 2-1 defeat against Watford on Saturday.
Per Mertesacker gave Arsenal the lead, but late goals from Troy Deeney and Tom Cleverley bagged the Hornets a shock win.