This appears to be legitimate, I was able to reproduce it on an HP cloud instance with the given parameters. The first 1000 actual requests always finish, but after that all fail.
I notice these kernel messages:
[ 1131.976324] TCP: Possible SYN flooding on port 80. Dropping request. Check SNMP counters.
But I don't think it is related.
I see this as well *sometimes*:
[Wed Jul 25 20:20:10 2012] [error] server reached MaxClients setting, consider raising the MaxClients setting
But MaxClients is set to 1500 so I'm not sure what that is.
The one difference mod_ssl would introduce would be the use of shared memory for statistical gathering. So maybe the stats are running into a shm limit.
I tried raising shmall to 4194304, but that just slowed things down a bit, it still fails right at 1000. I also tried raising shmmni to 8192, and that did nothing. Same for doubling shmmax.
On comparing strace's with and without mod_ssl enabled, the problem most likely lies with shared memory or semaphore opertaions, which only seem to be happening with mod_ssl. I also tried adjusting the numbers in /proc/sys/kernel/sem but that did not alleviate the problem.
Also its worth noting that 1000 processes is inefficient for more reasons than just memory. Context switching at the process level will be far more expensive than a threaded model. For that reason alone I've set this to "Medium", as its really just not a great way to configure apache.