Alternatively, you could just have efficient software that maximizes free memory for your actual work purposes and enough RAM to fit the task at hand, rather than churning data to and fro over a disk interface many orders of magnitude slower than the RAM which is itself likely not actually fast enough to keep up with the demands of the processor.
But, you know, that'd just be crazy.
C64 coders were totally crazy. They had only 64 kB and had to use all imaginable tricks to save few hundred bytes. But still, no matter how efficiently it is done, there is always upper limit...
But actually on Amiga the limit was in chip ram. Deluxe Paint was designed to use chip ram sparingly but code size was not important when it wasnt going to chip ram. It wasnt always important to optimize code for size and not even your data.
Obviously chip ram limitation crippled Amiga multitasking at some point. Even when there was enough (fast) ram there wasnt enough chip ram to store gfx and sound. Nothing is perfect, not even on Amiga :-)