On a 32 bit machine your processes are limited to addressing 4GB max, which the OS might then further reduce.
But your real problem is that Archive::Tar is a big fat pig that makes very poor use of memory. Install a proper tar command and tell CPAN.pm where to find it:
$ perl -MCPAN -eshell
> o conf tar /usr/local/bin/tar
(or whatever path is traditional on Windows)
> o conf commit
This is why in CPAN::ParseDistribution there is a use_tar option.
Incidentally, CPAN::ParseDistribution fails its tests on Windows, because of problems with forking and signals. If anyone thinks that they can fix it, patches are most welcome on Github. People saying "have you tried X Y and Z?", on the other hand, are not welcome, as I don't have a Windows licence, have no intention of getting one, and have no intention of learning how to drive Windows. If you think you can help, do please get in touch by email.