Yes that is a shame, Fusion 360 keeps all the stages (see picture) so you can go back and change one. Pity Rhino doesn’t.
this is not true, it just needs to store the transformations of the surface handles.
I would love to have at least the option to save the undo in a file. This way you can clear it when done, but also in between sessions close your working file. Plus, when it crashes, you still have the undo in the file you saved last.
Furthermore, this would be great for teaching as well. This alone should be worth investigating, as it will make it so much easier to learn Rhino this way and as a teacher to see what a student has done.
Do you have an in-house information that this is the case? It’s strange that after multiple control point adjustments of a single surface Rhino consumes a huge amount of memory that does not seem to be storing just the reposition of control points. Maybe the developers should say what’s stored in each Undo. This happened in Rhino 2, 3, 4, 5, 6 and 7.
Another, recent example is the SubD, which crashes my Rhino 7 every few minutes while working on a fairly simple single SubD surface with a mirrored copy (the crash happens no matter if I use “Mirror” or “Reflect SubD object”). Unfortunately, I even can’t record a video of it while crashing, because Rhino 7 quickly eats the memory of my PC (16 GB DDR3) and Windows 10 basically freezes and gets extremely laggy even after closing the crashed Rhino 7. The only way to make Windows 10 work good again is to restart it.
if this is the case then you should report this as a bug
This is already know and said to be fixed in 7.5 There were a fair bit of memory problems exactly with smaller subds. Dale has shared a lot of info about that
Not sure if a report would change anything, because huge system memory usage on Rhino scenes while using multiple Undos was reported countless times by many users over the years, yet it still happens even on very powerful PC’s. 
Hopefully the SubD memory allocation bug will be really fixed soon in Rhino 7.5 as I even can’t use it to design very simple objects at the moment.
I just tried with a simple surface and watch memory usage. I made couple hundred movements and I hardly see any difference. Then couple times back and forth Undo all the way back and Redo all the way forward, and I see a bit of increase (fom 1024 to 1070MB) Maybe you can make a screen recording that this happens at your side? Reporting always is useful, especially if you can make a simple reproducible case
that’s not a lot these days, why not install some more? I’ve got 96GB installed (though on a dual CPU setup)
It crashes while point editing a simple surface in a scene consisting multiple other objects. If the scene only has a single simple surface, then Rhino will not crash.
Rhino 6 was good for working on files up to 1 GB with 8 GB or RAM. When I upgraded to 12 GB of RAM, Rhino was just fine with files up to 1,5 GB size. Currently, with the 16 GB RAM I can work on scenes up to 2,3 GB in size.
However, crashes happen even when doing multiple point editing steps on a surface with other objects in the scene with 200-300 MB in size. No matter how much RAM I have, Rhino crashes once it consumes 5-5,5 GB of RAM. It will not utilize the rest of the memory for unknown reasons. Last year I also tried with another PC with 32 GB or RAM - again, crashes at 5 GB utilization.
I just had another crash of Rhino 7 while working on a SubD model in a scene consisting some NURBS models. The file’s size is just 37 MB. The used system memory was 1053 MB.