Initially, old computers would reserve so much of your system memory for graphics.
Nowadays, computers have graphics cards with dedicated GPU memory onboard the card, so theres no need for the system memory (RAM) to reserve any space.
Like previously said however, 32BIT (X84) Operating systems could only support up to a maximum of 3.2GB RAM.
While 64BIT (X64) Operating systems can have upto 128GB RAM I believe, as I read before, could be something different, but you'll never in a million years reach it.
Ofcourse the more system memory you have, the higher your system performance, and the more graphics memory you have, the higher your graphics performance.