memory exhausted when comparing large identical inputs

When comparing two inputs that are identical or almost identical, the memory usage of diff should be small. However comparing two completely identical inputs can trigger a memory exhausted error.

Actual result:
$ diff -u <(seq 1234567890) <(seq 1234567890) ; echo $?
diff: memory exhausted
2
$

Expected result:
$ diff -u <(seq 1234567890) <(seq 1234567890) ; echo $?
0
$

ProblemType: Bug
DistroRelease: Ubuntu 12.04
Package: diffutils 1:3.2-1ubuntu1
ProcVersionSignature: Ubuntu 3.2.0-24.39-generic 3.2.16
Uname: Linux 3.2.0-24-generic i686
NonfreeKernelModules: nvidia
ApportVersion: 2.0.1-0ubuntu8
Architecture: i386
Date: Thu Aug 2 11:30:37 2012
EcryptfsInUse: Yes
InstallationMedia: Ubuntu 11.04 "Natty Narwhal" - Release i386 (20110427.1)
ProcEnviron:
 LANGUAGE=en_US:en
 TERM=xterm
 PATH=(custom, user)
 LANG=en_US.UTF-8
 SHELL=/bin/bash
SourcePackage: diffutils
UpgradeStatus: Upgraded to precise on 2012-05-08 (85 days ago)