A Hebbian associative matrix (one of the simplest and weakest memory constructions) can store about 0.7 bits of information per parameter. If you have a state with 300M parameters (the size of a Llama 3 8B KV cache at 10K context length), and a context with 2.1 bits of entropy per token (a reasonable estimate), then the state can encode 100M tokens worth of information.
Real models obviously aren't powerful enough to operate at the limit, but you can see why this is a promising research direction.