He even mentions hard drive space separately, as something comparable to removable storage:
You could back up your whole hard drive on a floppy diskette
You're the biggest joke on the Internet
I can only conclude that he did understand the distinction between RAM and hard drive space. The song is full of jokes that show a deep understanding of the topic. Indeed I don't find any nits to pick.
Also, taken in context, telling somebody their whole HDD fits in a floppy is entirely consistent with bragging about your entirely unreal 100 gigs of RAM.
You could back up your whole hard drive on a floppy diskette
You're the biggest joke on the Internet
I can only conclude that he did understand the distinction between RAM and hard drive space. The song is full of jokes that show a deep understanding of the topic. Indeed I don't find any nits to pick.