CTGP-7 needs the extra memory as old 3DS models started to struggle with all the features CTGP-7 provides.
Not struggle in the sense of it starting to lag or anything apparent, but behind the scenes.
The whole point of extended memory mode is to give memory otherwise reserved by the system to the game so CTGP-7 can squeeze out just a bit more out of the older models.
It's not a "oh we just want to fuck you all" moment, it has a valid purpose. Not sure how the latest versions of CTGP-7 would run in standard memory mode. Perhaps "Out of memory" crashes here and there.