The .exe is 4K (it has been compressed using Crinkler), not the application's RAM requirements. The game .kkrieger for example is a 96K .exe, but uses several hundred MB of RAM when run.
Also, the strict size requirements can interfere with execution speed. From the .nfo again:
believe it or not, this was running at 30 fps in a gefoce 7900 at some
point, but size optimizations forced us to ask you for a pretty decent
graphics card, like a geforce 8800gtx or hd4850. please, make sure you
have d3d9_33.dll somewhere there. also, you only need windows xp.