Why does Chrome take up so much Memory?

Actually what is described by @OblivionBrontide is called caching. cached items are stored on HDD and that doesn't affect memory.

I think the main reason is Chrome's Multi-threaded Structure, so that every new tab & installed extensions runs in a separate thread. This is good because if a tab becomes unresponsive or one of your extensions crashes, it doesn't crash the whole browser but the downside is increased resource usage.

Maybe you have too many extensions installed, check the extensions & remove unnecessary ones.
You can also press Shift-ESC to open chrome's built-in task manager and see your memory usage there.