You can first create paddedFile.bin filled with 0xFF. Then insert the content of inputFile.bin.
$ tr "\000" "\377" < /dev/zero | dd ibs=1k count=100 of=paddedFile.bin
100+0 records in
200+0 records out
102400 bytes (102 kB) copied, 0,0114595 s, 8,9 MB/s
$ hexdump -C paddedFile.bin
00000000 ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff |................|
*
00019000
$ hexdump -C inputFile.bin
00000000 66 6f 6f 0a 62 61 72 0a |foo.bar.|
00000008
$ dd if=inputFile.bin of=paddedFile.bin conv=notrunc
0+1 records in
0+1 records out
8 bytes (8 B) copied, 7,4311e-05 s, 108 kB/s
$ hexdump -C paddedFile.bin
00000000 66 6f 6f 0a 62 61 72 0a ff ff ff ff ff ff ff ff |foo.bar.........|
00000010 ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff ff |................|
*
00019000
In the second dd invocation you have to use conv=notrunc so the output file does not get truncated.
Credits go to @kev (and this commandlinefu.com article) for the trick using tr to convert 0x00 to 0xFF