Too much memory being used while freeing up memory!

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On a machine with 3GB of RAM:
K=rand(256,200000); % works perfectly with or without ; at the end
K(:,1)=[];
Out of memory. Type HELP MEMORY for your options.
In other words, simply removing a column of a large matrix, pushes the memory usage above the amount available, when in fact what I'm trying to do is free up some memory.
This is obviously just a sub-optimal MATLAB implementation. I am using 2014a. Does this same problem persist in later versions? If so, how shall I work around it?

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