Thanks, interesting document, found here. The audio is really bad at the beginning and fluctuates throughout the talk. The interesting bit that you refer to is at 21 minutes from the start.
I'm trying to type in what he said directly from the audio:
The 16-bit design gave us a megabyte of memory. The 8086 has a 20-bit address. It is really a segmented 16-bit data path with segment registers that are really indexes. It is a 1-MB address space. And in this original design I took the upper 384K and tied it to a certain amount to provide for memory video, the ROM and I/O. And that left 640K for general purpose memory. And that leads to today's situation where people talk about the 640K barrier. The limit to how much memory you can put to these machines. I have to say that in 1981 while making those decisions I felt like I was providing enough freedom for 10 years. That is, a move from 64K to 640K felt like something that would last a great deal of time. Well, it didn't. It took only 6 years before people started to see that as a real problem.
Fortunately, there is a reasonable solution. Intel has moved forward with its chips families, the 286 chip introduced in 1984 moves us to a 24-bit address space (mumbles about segmented indirection, being not that good). That is sort of an intermediate milestone. in 1986 we moved up to the 386 where we get a full 32-bit offset to these segments that have been designed in this architecture. So what we have is a machine that can address 4GB of RAM. And I have to say with all honesty, I believe that it will take us more than 10 years to use up that address space.
So he never makes that exact quote, however one can understand why people picked it up. Essentially, BG thought in 1981 640K would be enough for everybody for a long while. Note that he was reasonably prudent regarding using up the 32-bit address space (that ship has sailed now).
Later, regarding memory, he says that computers should have about 1MB of RAM per MIPS. Specifically, he goes on to saying machines with 30-60MB of RAM should be desirable soon (in 1989).
In this talk he talks about many things, most are pretty insightful in fact: OS design, multitasking, parallelization, multi-processor designs, dynamic linking, object-oriented design. Funnily he talks at length about OS2 in a very positive way. This was before Windows 3 of course. He compares OS2 and Unix, saying that OS2 will take over the desktop and Unix the servers, and all other OSes will die out. He talks about the FSF, saying its task of creating a free Unix-like OS is doomed.
Some interesting comments on that talk here.