That's just in CPU performance.
CPU performance is how fast an action can happen, RAM is how many actions can happen.
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1GB is stupid in today's world. The iPhone 6 will be pushing more pixels than ever before, and with 1GB iPads already can't load 2 safari tabs in certain situations. So for example if I was writing this post, and needed to look up a definition in the dictionary, this whole website would be killed along with everything that I've put into this box and need to be reloaded.
There are 397,000 complaints on just this website alone related to having not enough RAM on the iPad. I would probably not be able to tell that to you if I was typing this on an iPad, without starting from scratch.
When you have so little RAM that you cannot do more than one task at a time in typical situations, your hardware is terrible. It's somewhat excusable for the iPad because most users spend a lot more time on each app window and more time with each task, but on a phone where I need driving directions, to look up a phone number and to play some music all at the same time, I don't want to have a long 10 second loading screen between every action.
Spotify sometimes takes over 2 minutes to connect and load if it gets dropped out of memory. That uses 2 minutes CPU power, 2 minutes of battery life, and 15 MB of LTE data, just to switch between two apps, which would cost nothing if there was more ram.