I have a pretty old router by modern standards, a WRT1200AC. It has 512MB. This is sufficient for packet shuffling, it's got 380MB free now. But I also run transmission on it, I've got a 512GB SATA in a $3 AliExpress-sourced USB dongle for that (I forgot it has eSATA! oh well) and I use nfsv4 to get data from it to my PC, so it's nice it has a little RAM.
You made the only important argument: As you say, 1GB is less than $5, it's really just not a real problem. This is not going to have any serious impact on the cost of the hardware. It's only a problem if they can't get the memory.