I think it´s like this.
Your level with the terrain would require more than 1,8 GB Nexus (preallocated virtual memory). This is indeed too much. I´ve read somewhere it´s impossible or becomes a source of instability to increase the Nexus beyond 1024 MB.
Most PC´s couldn´t handle even this, so the recommendation would be 200 MB.
If you´re target customer has a high end PC, you can go higher.

Nevertheless you can create big levels with terrain, if you split your large terrain into smaller cells, which are loaded (and removed) dynamically at runtime, depending on the visibility. It´s a little bit tricky, but I just recently explained this to another user, and it might be interesting for you. The thread is something like "huge levels with terrain" in the modelling section ...