Why is softwareupdated taking up all my memory?

My daemon shows 418 MB of RAM in Activity monitor (and see details below). It's not any concern for any of my Macs.

If you open up your Activity Monitor, you will likely see that the memory pressure (the important number) is green.

As long as you aren't in yellow, the system will use RAM as it sees fit, so there's really no problem with the numbers you report. All your RAM isn't committed, there's no point in the system reducing allocations with no pressure.

Also, consider control clicking on the memory column (when viewing memory) and select all the memory items. You can then update the post with real/private/shared memory footprint as well as the nominal memory size.

You could also double click on the line item for softwareupdated to inspect it:

The real thing to track will be to write down the exact time of each freeze and dig into the logs when that happens. Ram usage by the update daemon is almost certainly not the cause of that instability.