If you read that part again, it's implied that he simply crushes the snails and absorbs the protein, which then keeps him awake. It doesn't read as though he ingested a whole snail.
And yeah, the Andalites must produce waste-- for one thing, they have a toilet. For another, they're organic creatures
Thing is, I'm having trouble picturing what form that would take. Liquid waste exclusively is possible, I suppose, but I don't know how likely. In any case, it needs to be something that would be expelled in such a way that the Andalites aren't just going to step on it again and ingest it.
...
I just had a thought. What if all Andalite waste is processed and expelled as gas? And an Andalite toilet is just a well-ventilated private room?