Now you've doubled your RAM requirements, because all but the newest consumer routers use NOR flash and can directly execute code from the flash without having to copy it to RAM first. If you have to start using RAM to hold code and static data in addition to transient stuff, you're going to need to bump up a size and that's going to ruin the profit margins on all the dirt-cheap low-end routers out there.
There's your reason. Good luck getting a modern OS to fit in that. Twice that would still be crowded.
Also, it's 2.4GHz only. There's no justification for ever recommending a WiFi device that can't use the 5GHz band.