This looks highly reminiscent (though not exactly the same, pedants) of why people used to get excited about using SAX instead of DOM for xml parsing.
1. Inefficient parser implementation. It's just... very easy to allocate way too much memory if you don't think about large-scale documents, and very difficult to measure. Common problem with many (but not all) JSON parsers.
2. CPython in-memory representation is large compared to compiled languages. So e.g. 4-digit integer is 5-6 bytes in JSON, 8 in Rust if you do i64, 25ish in CPython. An empty dictionary is 64 bytes.
Our JSON parser, jiter (https://github.com/pydantic/jiter) already supports iterative parsing, so it's "just" a matter of solving the lifetimes in pydantic-core to validate as we parse.
This should make pydantic around 3x faster at parsing JSON and significantly reduce the memory overhead.