yes, the iPad 3 is capable of handling large files. So this seems to be indeed a problem of Cubasis, that is for sure. Furthermore, I can also confirm that the interface gets sluggish when handling big files.
However, I still cannot reproduce your issues on my iPad 3. It would be very helpful if you could provide as with your crash logs so that we can spot and fix your issues (see Steinberg Forums). I also have forwarded your descriptions to development so that they can investigate the issue as well.