Well, a quick search says that the actual total size of PS1 RE2 was around 750 MB and it could have been made on one disk but for an error that was discovered too late, so they ended up putting it on two disks and having much of the same data on both. That's still a staggering difference, but that same quick search says that the video and audio were compressed to dreadful quality... but at the same time they were able to add higher resolution textures for the game itself.

As someone who has played through RE2 many times on N64, I can attest that the video compression is indeed severe, and looks horrible by today's standards, but at the time it was acceptable to someone like myself who could never afford many consoles and so played the games available on the ones I owned. No Playstation meant I played on N64. :) The rest of the game looks all right though, at least in comparison to other games from that time.
Actually, the Expansion Pak wasn't for the games themselves, it was an addon for the N64 console that doubled the system RAM to 8MB. A handful of games required the extra RAM in order to function, including Zelda: Majora's Mask, and Donkey Kong 64. Certain other games required it to be present in order for you to access the full options. Of the games I own on N64, a notable example of that is Perfect Dark, which was the highest-selling M-rated game on the N64. Without the Expansion Pak, the gameplay is extremely limited. Singleplayer is disabled entirely, and the multiplayer options are quite restricted.

There are lots of "explanations" about why Nintendo didn't simply build the console with 8MB of RAM in the first place, but the two most consistently accepted reasons are:

First, in those days RAM was very expensive and Nintendo wanted to keep costs down as much as possible. Nintendo has for most of its existence tried to keep costs down to the point that they made a profit on not just the games but also the consoles. Compare that with Sony and Microsoft, who usually sell their consoles (even as expensive as they are) at a loss, and hope to make up for it in game sales. This is why Nintendo has almost NEVER had the most powerful systems, even when their latest console is the newest on the market.

Second, most games that were capable of using the extra RAM, let alone outright requiring it, weren't released until fairly late in the N64's life cycle. So again, from a cost perspective, it didn't make sense to include the RAM at the outset when it would do nothing except add to the cost of the console. The games that needed it were years in the future at the beginning of the N64's time.

EDIT - typo fixes
EDIT 2 - fixed an error in information

Another thing is that cartridge games don't need as much RAM as disk based games.

With a disk based game, the game (or the BIOS, when first booting the console) must first load the game's code into RAM in order to execute it. Aside from causing load times, this means that the game's code and static data takes up RAM as long as it's likely to be used. As a result, consoles (and computers) that load their games from disks need to have extra RAM to account for this. (This includes things like the Famicom Disk System, which included extra RAM to account for this.)

With a cartridge based game, on the other hand, the cartridge's contents are mapped into the CPU's address space. (Well, some of it may be mapped into video memory, but that depends on the system and sometimes game.) The CPU can then read from the cartridge, and even execute code on it, without having to first load it into RAM. This cuts down on load times, and also means that the console doesn't need to have extra RAM to account for this. In addition, it's possible for extra RAM to be included on the cartridge. One common trick was for them to put both RAM and a battery in the cartridge, allowing the cartridge RAM to retain its contents on power-off; this would allow saved games to be stored on the cartridge, and is how many games (The Legend of Zelda being one of the first, though the Japanese version seems to have been an FDS game) allowed saving without either an external device or having to use passwords; CD-ROM based games didn't have this option and therefore external devices (memory cards) were needed.)

It goes to show how storage hungry movies and audio are, that they can inflate the size by some 20-30 times, compared to a fully 3D game, that only needs a few MB. It's pretty crazy, when you think about it.

All of these storage issues started with FMV creeping into games in the mid 90s. I remember Wing Commander 3 being on about 4 CDs. The actual game was probably a miniscule portion of that.

Developers badly need to provide separate 4K and 1080p versions of games, so they're not slamming the gamers that don't want the bloat of 4K.

I'm not really up to date and/or have a minimalist mindset when thinking about programs (even art data: highest res is not always necessary, for example). To me 20 GB is more like a lean operative system plus essential productivity software. A single game weighting 20GB could be a sprawling epic series, or an hyperrealistic sim. I'm flabbergasted that for you (and many other, probably younger and/or better equipped gamers) that is a minimum.. Welcome, o Commodore64/Atari Spectrum/PC-Engine/etc. user! :-D

At first, I read 720p.. and I thought, "fine, no 4K needed"
You probably intended to write "<1GB"?

Eh?!? Isn't it an old console classic? Or is it a new chapter?

It's a "remastering".
Basically they slapped 4K textures, cleaned up the code a smidge, and bam! 30 bucks, please!

The smaller the game the better, of course. 20GBs is essentially, roughly the starting point where I make the hard decisions, but it can be earlier. As much as I loved F.E.A.R. well it took almost 15GBs (and I'm not well equipped or anything, here I am on a 500GBs SSD for now, bigger is definitely more expensive) and since I already have the installer for it it was an easy decision to uninstall it on completion - I can reinstall later if I need to replay this extremely well crafted game.

But instead of that 20GBs going to Fear, it could go to, like what you said, a sprawling epic series. Like Skyrim SE/AE (a single game I know) - a game that is, as Bethesda likes to market some of their games, a second life.

Whoops, yes, of course.

On PC: It should be reasonable... no clear limit. Obviously, if a game got mediocre content and totally average graphic... 100+ GB is not reasonable.

On Smartphone: Up to 30 GB is OK. Above 30 is slowly going over the edge, as it gets hard to handle it with the big updates and shader compilation after every update.

Actually only got 4 of the most demanding Android games°° there, mainly for testing purpose, and they all are between 20 and 35 GB. I think 20 is enough for great graphics there but up to 30 is fine.

°°Genshin Impact, Honkai Star Rail, Tower of Fantasy and Wuthering Waves

However: Smartphone processors are still doing bigger advancement than PC processors. The newest Snapdragon 8 Elite which is just 1 year more recent already got nearly twice the processing performance vs. the just 1 year older Snapdragon 8 Gen 2 (which is just 1 Smartphone generation for Xiaomi... 14 to 15). A PC can not make such big "steps" and if so... the price will increase drastically (4090 and 5090 is a cash destroyer). On the X86 CPUs not any bigger of a improvement but perhaps Zen 6 might be a bigger step. As well thanks to a smaller node (which is currently Smartphone only).

Not that i enjoy "phone gaming" at all but... they finally are almost hitting PS4 Pro performance (between PS4 and PS4 Pro), with RT, which means... in theory they can already play almost any game and every single GOG classics (if the Windows emulator is not giving up).

AMD is changing the node to something smaller because the server market is asking for... higher efficiency, very critical there. The consumers are not the most important customers anymore... they pay to less and consume to much, i assume.

Of course, "Wuthering Waves", probably the best looking Android game so far (as well those other games) and can be played as a PC version as well... with solid graphics, the specs, which makes it even more clear what a modern "phone processor" is already capable to handle:

Minimum:
Requires a 64-bit processor and operating system
OS: Windows10 64-bit
Processor: Intel Core i5 (9th Gen) / Ryzen 2700
Memory: 16 GB RAM
Graphics: NVIDIA GeForce GTX 1060/AMD Radeon RX 570/Intel ARC A380
Network: Broadband Internet connection
Storage: 60 GB available space
Sound Card: Windows Compatible Audio Device
Additional Notes: HDD Supported, SSD Recommended.

Recommended:
Requires a 64-bit processor and operating system
OS: Windows10 64-bit
Processor: Intel Core i7 (9th Gen) / Ryzen 3700
Memory: 16 GB RAM
Graphics: NVIDIA GeForce RTX 2060/AMD Radeon RX 5700XT/intel ARC A750
Network: Broadband Internet connection
Storage: 60 GB available space
Sound Card: Windows Compatible Audio Device
Additional Notes: SSD Required.

This is a phone game! Some... i mean many... people are moaning that Croc is to demanding.
Sure i can probably emulate Croc on my phone... but i would need the game first.