I'm afraid we don't have much clues that could directly give the answer. I have only one guess, although I believe this is not the case:
When stress testing, are the browser and the web server located on different computers? This is the case, when you would actually monitor the server memory usage.
Let me add some more detail:
During the form submission, an instance of the RadUploadHttpModule
starts parsing the upload request.
The request is being parsed chunk by chunk (binary data), where the chunk size is between 32kB and 1 MB.
The chunk is actually the binary data, which is being currently processed. It is the only part of a file, which is kept in the memory.
A small note - I mention chunks, which are part of a file; the data, which is part of the page text fields is kept in the memory, as it is needed for the page to run expectedly, but its size is relatively small.
There is one chunk, which is typically bigger than the others - the initial chunk of a file upload request, but again it is not that big and it is not kept in the memory after it is parsed.
Having said that, if you have ten users, simultaneously uploading files (i.e. you have ten simultaneous requests), the memory consumption should be less than 100 MB.
Let me know if that helps.
the Telerik team