Even if they stuck with the custom built ARM v7 (which is a 32 bit instruction set) cores they could have increased the RAM all the way to 3GB.
The problem with Android is that it's a complete memory hog due to some botched design and heavy use of Java in apps, the UI and many other parts of the OS. iOS and apps on it being built in C and Objective C means they use a lot less RAM by default and I don't think adding more RAM will do anything except give app developers the message that they can get sloppy with memory use. It'll also make it less likely that Apple gets really sloppy with RAM usage in future iOS versions considering how many devices they'd have to discontinue support for if they started demanding 2GB or RAM.
Mind you, I don't even own any iOS devices apart from an old 2nd gen iPod Touch that's been collecting dust at the bottom of a cardboard box for the last 4 years, but I still think that on iOS more than 1GB of RAM is just spec fetishism.
Dalvik is the reason why Android is/was a memory hog. It's not the fact java is used, it's the environment and how they are excuting programs.
ART is going to fix that.