Aside from the perfect solution fallacy, pragmatically it's because most operating systems require more than that to run. Debian's current recommended minimum is 512 MB, though they note that with swap enabled, as little as 350 MB is possible. If you wanted to run something more esoteric like Damn Small Linux, it's possible with as little as 64 MB last I checked.

In any case, this is for the OS itself - the webserver, application, database, etc. will all of course require their own. For a well-optimized program with a well-optimized schema, 1 GB is a reasonable lower bound.

Oh I'm well aware of the existence of operating systems that run in 32MB of RAM or less. So - why not? I think a well-optimised application server (especially one that uses SQLite as a datastore like the article proposes) can fit just fine in 128MB of RAM total, or 256MB if we're being generous. A whole gigabyte of memory seems rather extravagant, no? You could run half a dozen properly optimised apps on such a box.