I tracked this down, eventually. Under RHEL/CentOS 7.2, the rootfs was
limited to the size of available memory. Under 7.3, there's an
artificial restriction of 50% of total system memory. The default size
of a VM under "virt-manager" is 1G, which creates a ~500MB rootfs in the
installer. That filesystem is too small to run the installation in most
cases.
The documented minimum is still 1GB of RAM, but that's no longer
sufficient to complete the installation of 7.3:
https://access.redhat.com/articles/rhel-limits
I'm going to file a bug and ask Red Hat to document the new minimums.
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