Markhu, that is exactly what I am saying about FPGA BRAM. This is the internal "block RAM" in the FPGA that is like very fast SRAM (like cache or on-chip memory). The Papilio 500 has around 40KB internal BRAM whereas the Mojo has around 64KB internal BRAM (this is for 8-bit memory, the actual memory is 9-bit if your design can use that). This is what the bitfiles you mention have seen are using. Only the Papilio Pro has external SDRAM (and the "rare" Papilio Plus with SRAM).
There is indeed a fair amount you can do with this much fast memory on the Mojo. It is however, not quite enough for a full color bitmap (e.g., even a 256 color 640x480x8-bit would be ~300KB, for 24-bit "true color" that would be more like ~900KB).
As I mentioned, with tile maps and sprites etc. there is quite a lot of interesting things that can be achieved. Look at what has been done with much more limited 8-bit computer demos. The FPGA allows a huge amount of flexibility compared to those (and with a comparable amount of memory). If the FPGA in the Mojo had more memory it would be probably closer to an Amiga or low-end PC graphics for graphics (like 33Mhz 386+VGA perhaps).
Projects you are planning or working on with the Mojo
During the kickstarter campaign, I recall there was some discussion about a possible add-on board for the Mojo with expansion memory. We ended up getting the LED shield instead. Perhaps that concept is still on the table as a followup product? Memory and some I/O connectors (VGA / HDMI / Ethernet / Analog Audio) would be pretty cool. Or perhaps memory + a decent size touchscreen TFT LCD panel. I'm not sure if the HDMI is doable though - since I think it needs LVDS pairs? And I'm not sure how well that would work going through the Mojo shield headers?