pandas DataFrames are persisted in memory. The rule of thumb was for RAM capacity / dataset size in memory to be 5-10x as of 2017. Let's assume that pandas has made improvements and it's more like 2x now.
That means you can process datasets that take up 8GB of RAM in memory on a 16GB machine. But 8GB of RAM in memory is a lot different than what you'd expect with pandas.
pandas historically persisted string columns as objects, which was wildly inefficient. The new string[pyarrow] column type is around 3.5 times more efficient from what I've seen.
Let's say a pandas user can only process a string dataset that has 2GB of data on disk (8GB in memory) on their 16GB machine for a particular analysis. If their dataset grows to 3GB, then the analysis errors out with an out of memory exception.
Perhaps this user can now start processing string datasets up to 7GB (3.5 times bigger) with this more efficient string column type. This is a big deal for a lot of pandas users.