Looks like somebody made a mistake with the pricing and made r3 instances the same price in all regions. This makes them a lot cheaper in regions where prices of other instances are higher:

Eg Pricing in US.East:

  r3.xlarge 4 Cores 30.5G RAM  $0.350/h
  m3.xlarge 4 cores 15G RAM    $0.280/h

Pricing in Tokyo:

  r3.xlarge 4 Cores 30.5G RAM  $0.350/h
  m3.xlarge 4 cores 15G RAM    $0.405/h

It'll probably be fixed soon though..

What makes these instances "Memory Optimised"?

Properly just referring to large amount of Memory. It should be Large Memory instance.