I've not tried GTA 5 yet but the GTA world is generally very limited to do what it does. A great example would be GTA 3 and Vice City. Open world games that ran on PS2 hardware. Amazing... However they did it by tracking very little. Only things in your FOV and relevant to what was happening (quest NPCs, police chasing you) were handled. Everything else was not there. Turn around and then around again, and traffic would be totally different because it was not tracked off screen. Drops/pickups disappear when you go slightly out of range. Most objects couldn't be interacted with past them being damaged, which would fix offscreen.. Stuff like that.
Fallout/Skyrim track quite a bit, some of it in a very permanent fashion. Granted not all of it is in memory or simulated at one time (there are a certain number of grids simulated at once) but it is still pretty complex. You can go in to an area, interact with things, pick them up drop them off move them around, travel far away, come back and they'll be in the same state you left them.
Not saying clever optimization can't fix some thing, but there's limits. Also there are limits to how much time it is worth spending. Say you can engineer a clever system that uses all kinds of hacks and tricks to reduce what is tracked and how it is tracked, and then you optimize the shit out of it to reduce the space it takes... great but how many man-hours did that take? Is it worth it? Time is money in games, and you don't want to spend it on things unless it is needed.
So if projected sales from the older consoles aren't enough to justify the development costs and/or offset the cuts that have to be made, you don't do it.