Glaiel, thanks for showing your completely superior knowledge of proper coding techniques. Guess my degree isn't worth jack. Srysly, though, less lines can only slow down your game if you're running loops that make it as if there are more lines than before, or calling external classes that have more lines, especially in an interpreted language like Actionscript. This goes for any game; console, native pc, or web.
So, you're going to say, "why do games on the DS or PSP have full functionality when the system has less memory?" Simple:
1) Because the code is compiled.
2) Because the bitmaps are indexed to a format that is native to the system.
3) Because it's the only thing running on the system, so RAM is focused only on that one thing.
3D in Flash is still a very new technology. Even Silverlight, which from the beginning, allowed for native 3D processing, get's sluggish when you pump this level of physics in it. Because, yes, the physics in my game, coupled with any size level, is a HUGE drain on RAM.