Sure it can. When I play WoW years ago there were addons that could take up over a gig of ram. The mods that were item database related could often obliterate performance. I had a beefy PC at the time and there were still a few popular mods I couldn't run.
The perceived advantage of something like Lua is that it's easy to write, allows for fast iteration, and designers/artists can use it. The issue is that designers/artists really shouldn't be using it. To write fast code it requires a programmer and if you have a programmer why not just do it in C++ where it will be several times faster?
A common game development pattern is to write the bulk of gameplay code in a scripting language and at the 11th hour in a desperate panic start moving as much of it as possible to C++ until you fit in 360/PS3 memory and are fast enough.
The perceived advantage of something like Lua is that it's easy to write, allows for fast iteration, and designers/artists can use it. The issue is that designers/artists really shouldn't be using it. To write fast code it requires a programmer and if you have a programmer why not just do it in C++ where it will be several times faster?
A common game development pattern is to write the bulk of gameplay code in a scripting language and at the 11th hour in a desperate panic start moving as much of it as possible to C++ until you fit in 360/PS3 memory and are fast enough.