The storage is eMMC, basically the cheapest thing available once you've committed. You'd have to actively try to buy eMMC smaller than 2-4GB. Same for the RAM, that's a single chip. It's not a heavy spec, just somewhere near the bottom of the cost curve for those particular parts.

They probably used similar parts in another product and threw them into the routers for the additional order volume, known bring-up risk, and dev benefits. The pixel series also uses Samsung eMMC, iirc.

They probably budgeted a dollar for storage and a dollar for ram, or close to it.

Sometimes it's nice to be able to run a normal OS.