Hmmm. Perculiar, is there anyway you can run install whilst also running $ top?
I use tmux on my instances so I can split my terminal, it would be interesting to see if the memory usage of R actually hits the limit when its installing. You could just open two terminal windows.
Apart from that, you could try gc() after every time you install a package, but that's not very handy if you're doing them all in a install.packages(c(<list of things>)) way.