Probably not less memory. zlib is based on a design that dates back to an era where you might only have 250-350 kilobytes (not a typo) of RAM to work with, and it was never really extended beyond that. It has a window it keeps in memory and if your file is longer than that window, you hit peak memory and stay there (you might actually hit that window immediately. I've forgotten how that part works, but some chunks of memory are pre-allocated).
That's really DEFLATE, the sliding window of standard deflate is 32KB. Both compression and decompression have some overhead (compression more so as you might want to have index tables and whatnot to make finding matcher faster) but even with the worst possible intention there's only so much overhead you can add.
That's probably a misunderstanding or misremembering: the DEFLATE format can only encode distances of 32K (the proprietary DEFLATE64 allows 64K distances but not everything supports it).
