Nexus S has 16GB of internal storage too, but it's considered to be the SD card (no external SD card slot). It only has 1GB RAM, but for some reason apps are allowed to install there instead of the SD card. Install too many, and you fill up that 1GB with installed apps and running apps, and then the whole OS starts to chug.
Are you sure apps are allowed in to install in RAM? It seems to me you're confusing RAM with internal storage. You don't fill up the 1 GB RAM with apps, you use the 16 GB internal storage for them.
