Well some of us have systems that can handle a little more, Gigantic on my computer barely raises a sweat, so to speak. And who's talking about factors of 10? Just a couple more sectors all around would be nice. I'm sure my computer could handle even 4 more around, which would be ideal with 9 races. It would give everyone lots of room to develop good sized empires. As it stands, there's always a race or two that gets crowded out early in the game, and never amounts to very much.
In a galaxy with 9 AI civs, it's inevitable that one or two of them will be crowded out and conquered early on. When you think about it, isn't it far better to match your wits against seven AI opponents who have had the luck or programming to make a good start in the galaxy?
As far as game dimensions go, remember that although you wouldn't see a hundred-fold increase in memory usage with a tenfold increase in each axis, there would be room for the same number of objects less densely populated, or a hundred times as many objects as presently occupy a gigantic galaxy. It's a nice round figure.
Like I said, the real problem with larger galaxies is not memory but the AI not having the ability to navigate such vastness and actually be able to accomplish anything. Humans have the advantage in being able to purposely decide on a course of action with a mere glance at the map.