Servers very frequently benefit from lower memory footprints, as it can also dramatically improve performance by improving cache efficiency.
I'm always blown away at the memory usage of JVM apps. Part of it is the fact that java has encouraged insanity-inducing inheritance hierarchies...but also it is incredibly hard to do dead code optimization on for such a static (type and compilation model) language (I blame dymanic classloading, but that's more of a guess than anything). Maybe what you're saying is the reason we don't see noticable GC pauses until you start seeing large amounts of data...but it is still a huge pain for low memory environments like phones, embedded devices, IoT, etc. And while memory usage is always gonna be higher on a GC'd language, the JVM still consumes vastly more memory than other languages like OCaml, D, Go, etc.