Someone in our company ran into this several weeks ago, and I had kind of a fun time tracking down the problem. The summary and most of the comments are missing a lot of details and nuance, which actually make this problem kind of interesting.
1) It wasn't even running out of memory
Sun/Oracle's VM implementation (HotSpot) has a concept of a permanent generation, which is separate from the rest of the heap and has its own maximum size. This generation holds stuff like the code cache and interned strings. Whether or not this is a good concept is debatable, and as far as I know, they are planning to do away with it in the future as JRockit and HotSpot merge. At any rate, this is the space that was filling up. This probably didn't happen very quickly on a normal Eclipse distribution, but with a lot of plugins installed (and thus a lot of classes being loaded) it crashed pretty quickly.
2) This is only because of somewhat subtle differences between the various VMs
HotSpot is the only major JVM I know of that has a PermGen space - J9 (IBM) and JRockit (Oracle, via BEA) don't have this concept. Thus the requirement to be able to behave differently based on which VM you are using. Being able to behave properly on multiple VMs is especially important for Eclipse because not only do they have a lot of people using it on HotSpot, but because it is the basis for IBM's RAD, they have a ton of people using it on J9 as well.
3) This problem is in the launcher, not Eclipse itself
So, the crux of the problem is that Eclipse needs to start a VM, and has to know the proper flags to pass to it *before* it starts up. A few people have suggested trying reflection or other runtime methods as a better way to solve this, but this ignores a) Once the VM has started up, you can't change the heap or PermGen sizes, and b) As far as I know, there is no way to query the VM at runtime to figure out what its underlying heap structure looks like - that is an implementation detail.
So, while it does kind of suck that Eclipse was relying on a vendor name, it is trickier to solve than it appears at first glance. The only really graceful ways I can think of to solve this problem rely on some changes to the VM spec.