Each application pool has a memory that contains a couple of megabytes, if the problem is due to lack of shared memory. This may not help.
Having said that, we run all of our websites in our own application pools by default, but we usually have a maximum of one server, so I have no experience with a large number of application pools at once.
We also see that the benefits of being able to process one application pool without affecting other sites are a big advantage.
Finally, as well as isolation (as Guff mentions), you can configure the settings of each application pool to limit memory usage, etc., as well as identifiers and permissions. (We will use different websites with different accounts that would only have permissions for their own databases)
You can also find out about this by Server Fault error: https://serverfault.com/questions/2106/why-add-additional-application-pools-in-iis
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