Yep, it looks like it requires a 128KB Apple //e and up. In the comments of the blog, Mechner mentions he couldn't get anyone interested in porting it to the C64 at the time as the system was considered too old. I guess by '89, 128 KB Commodores weren't considered that interesting of a market.
The original must have needed all the memory it could get its hands on - looks like it doesn't use the Apple //'s 'double high res' modes, for instance.
Forum thread of Sanglard trying to sort the thing out, with the help of some 6502-heads is also entertaining:
http://forum.6502.org/viewtopic.php?f=2&t=2223
Almost makes you want to combine the two actually hacker-ish posts of the last two days - the lightweight block ciphers and this and burn a weekend implementing SIMON in 6502 assembly. Almost.
