You may want to read this: "“Out Of Memory” Does Not Refer to Physical Memory" by Eric Lippert.
In short, and very simplified, "Out of memory" does not really mean that the amount of available memory is too small. The most common reason is that within the current address space, there is no contiguous portion of memory that is large enough to serve the wanted allocation. If you have 100 blocks, each 4 MB large, that is not going to help you when you need one 5 MB block.
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