Ideally, I would want to configure our Azure Web App application settings using build variables (on VSTS), for example:
We perform our publish tasks using P
The variables have already been passed to PowerShell script when the build start. If I understand your question correctly, you want to use these variables together instead of specifying them one by one like following:
PrepareAppSettings.ps1 -websiteName "MyWebApp" -appsettings $(AllVariables)
Then there isn't any way to do this.
If you want to reduce the strings passed to the PowerShell script, you can set the variable as following:
VariableName: MyRandomService | Value:"MyRandomService" = xxxxxxxx
Then you just need to call the PowerShell script with variable name passed.