Perhaps I wasn't clear... it's not a fault at all, in fact MongoDB is behaving exactly how you'd expect and hope when the dataset gets too large. I just couldn't find anything out there to confirm this :)
Btw it's worth noting that there are on-disk databases that will behave pathologically in scenarios where the available memory starts to get seriously smaller than dataset. For instance I saw instances of MySQL that once the data set size reached a given threshold the performance started degradating exponentially. This can probably be avoided.