Yes, for releasing a cutting-edge device in 2010 and it comes with only 256mb of ram. All Apple had to do was to spend extra $5.5 to bump the memory to 512mb but chose not to.
As a developer, I can tell you it is highly probable the issue described is a software bug. What I can't tell is if the bug is in the OS or in the Application in question.
This is plainly obvious because as he said, the app worked several times previous without issue. This indicates that when the app was terminated, all memory in use was not properly freed. Thus a slow memory leak eventually resulting in out of memory errors. The memory may have been freed by the app, but the OS might have a bug that didn't release it, or the app might not be freeing the memory.
As to whether the memory is sufficient for multitasking, I suspect that will depend on the set of applications you're running. I think it will be fine for light multitasking, of the type Apple keeps talking about -- running 1 app while listening to pandora, running 1 app taking a phone call etc. All their examples are basically of 2 apps running. I suspect when you start hitting 4-5 apps, actually running, not paused, we'll start to see problems. In particular out of memory issues and/or slow app switches if they have implemented paging of virtual memory to flash.