The OS already uses 950M of its 1GB of RAM.
Remember, memory is like a keg of beer, if everyone drinks it all, it's gone regardless of how you "distribute" it to people into smaller sized Solo cups or whatever.
I can think of a few things that could help but not solve the problem, but the crux of the problem is that it's still a finite resource:
https://developer.android.com/topic/performance/memory-overv...
Working against that, you also have Gates' Law.
Anyway, it's my understanding that Android uses custom heap size limits to help keep things running smoothly. This combined with efficient garbage collection makes for a generally smooth user experience on a constrained device like a phone or tablet. Android will cache, and later kill, processes that aren't being used, to free up memory for active processes. Memory may be a finite resource, but not in the way you described; it's not permanently used up and can always be freed for foreground tasks.
Maybe on a 2011 device with 256MB of memory and Gingerbread this was true, but memory management hasn't been a problem on Android phones for a few years now. The memory management has improved in parallel with the amount of available memory, to the point where the device can actually perform worse if the user goes mucking about and closing apps manually. With Marshmallow and Nougat it has become even more efficient.