Well, you can't do O(1) part for most commands :) redis can do a lot of stuff at near constant (and superfast) speed. Databases do become slower when your dataset is big
You can buy servers with 1TB RAM for reasonable price. Also, you don't need to go this big, even moderate-sized tables are slow. Indexes are usually log(n) at best (and eating more RAM anyway, you can get said log(n) if all index data is in memory, and at this point regular sql db eating more ram than redis), and insert time is slowing down since you need to update index as well (and maybe reorg stuff around)
