I'd say 50.5 MB of memory for OS 9.1 is very good. Memory used for your Disk Cache (in the Memory control panel) is added to the System use. So, if your Disk Cache is set for 8000K, for example, your System is actually using only 42.5 MB.
I'm also using OS 9.1 (with VM turned off) and "About This Computer" shows a system usage of about 60 MB. My Disk Cache is set for 8000K and I'm using a 5000K RAM Disk (this is also added to the System memory). So my System is actually using about 47 MB (60 - 13).
As for the missing 5 Megs, that's due to a little memory fragmentation which is normal also. See Apple's TIL #19064.
The memory indicated is not all of your memory; it's just the "Largest Unused Block."
Hope this helps,