Will setting the receive quotas to large values cause my service to run out of memory?

It depends on the messages that people send you.

Assigning large values to quotas does not cause WCF to immediately allocate the amount of memory that you specify as the quota value. Therefore, you can change the quota values and not have any problems starting up your service or receiving the same messages that you could receive before. However, if someone decides to send you a really big message, then that message will be processed up to the quota size that you specified. If both the quota value and the message size are large enough, then your service may possibly run out of memory trying to process the message.

The quota value is supposed to be the maximum amount that you think that you can afford. If the quota value is larger than the amount that will break your service, then having such a large quota value does not provide protection against messages within that size range.