"Incorrect." The amount of RAM actually has nothing at all to do with it.
A Paradox table consists of up to 65,535 "blocks" of some multiple of 2K per block, with an integral number of records per block. The block-size is probably much too small. With 494,000-odd records, I'm sure of it.
Block-sizes are changed by editing the BDE Configuration parameter, exiting and restarting Paradox, then constructing a new table with the same structure as the old. The Borland web-site at http://www.borland.com/devsupport/bde has a utility to do it.
Index files are also "Paradox tables," and a "table is full" usually when any index to that table is full.
I have been using paradox for years (more than we want to count) and I do believe that version 4.5 (back when they had dos versions as well) had the Ram limit. But you are correct and forced me to review the current specs.