There has to be enough RAM to future-proof it for the next 5 years. That's the lifetime of a console before a new version comes out. I don't want them to be releasing newer consoles each year with more RAM and capabilities, resulting in a fragmented software market.
Why would the lifetime of a $99 console be 5 years? At that price, they could release new ones faster. Also, as it will run on Android, games from previous generations will run on the new one.
