At a company I worked at they explicitly told us they will do anything to avoid upgrading the hardware from 1GB to 4GB because it increases costs. They would rather we optimize the software to use less RAM than upgrade the hardware.

I remember arguing as well with people about 0.10$ components. They told me it was a no go, not even a point of bringing it up. Sometimes even a 0.01$ is a big deal.

Yeah, prices do indeed go up beyond 1GB - but we're talking about systemd needing 8MB of RAM. With small RAM chips there is more variation between parts than there is between sizes - hence the linked 2Gbit chip being cheaper than the 1Gbit one despite both of them being the cheapest option at LCSC. Those 8MBytes of systemd might push you from needing 1Gbit of RAM to 2Gbit, but it isn't going to push you from 8Gbit to 64Gbit - and as shown 1Gbit and 2Gbit don't meaningfully differ in price.

There are a lot of other factors involved with respinning hardware which make an upgrade a lot more expensive than simply a BOM increase. I can definitely understand why an existing product wouldn't be upgraded, but for a new product going to a bigger memory chip is a far smaller hurdle. The added software engineering time for working around RAM limitations can easily outweigh any money saved on the BOM, with choosing a smaller chip ending up being penny-wise pound-foolish.

And indeed, an extra $0.10 or even $0.01 can be a big deal. But those cheap systems usually aren't powerful enough to meaningfully run Linux in the first place: just because you can technically hack a $1.00 RP2040 or ESP32 into running Linux doesn't mean it is a good idea to actually do so. If your product is both cheap enough that it represents a significant fraction of your BOM and high-volume enough that you can afford the engineering time in the first place, why not use a purpose-built embedded OS like Zephyr?