I think you're not completely right...
YES, the shadows are a copy of the model but
NO, they don't consume the same amount of mem,
as far as I know, because they're not models but sprites that look like the original model
But I don't know that for sure. I only experienced that the decrease in perfomance is not that high so... just keep your shadow-flags
set. Because if thee's anyone out there who thinks he can play a new game with his p2 350 and an 8mb graphics card...