I had the same problem with webfaction - be sure to set your static files to be delivered by ngenix or apache. I followed the info in the link above and it reduced my memory usage However I have both a Django and a Web2py instance set up on my account and Web2py takes more memory for my a small test app (maybe a need a few more tweaks as I'd expect Web2py to be smaller).
One other gotcha to watch out for - on webfaction (and possibly other hosting services) your app must be defined at the root of your domain. I wasted a day trying to configure my app as a subdomain. (iow - myacct.webfaction.com/myweb2pyapp works; myacct.webfaction.com/mywepapps/myweb2pyapp *WILL NOT WORK*. This is mentioned in the install script that webfaction provides for installing web2py, but I missed it. So read it carefully. Webfaction support also missed this when I spent a futile day trying to get it to work. Hope this helps, BrendanC