Insufficient memory was available to complete the operation.

Yeah, this is pretty great. I have a 233.9 MB image I need to place in Illustrator in order to produce a wall graphic. "Insufficient Memory", even though I've done similar numerous times before. If I posted how many times Adobe's "upgraded" software actively made my job HARDER, I'd never leave this forum

Have you tried doing this by Placing (File>Place) the image rather than dragging and dropping? Adobe has a page listing the known issues with Mojave Known issues - Running Illustrator CC on macOS 10.14 Mojave but with Mojave still so new it seems highly likely that new issue will pop up when least expected.

You might also like to try trashing your preferences (after an OS upgrade this is usually a good idea).

To do so:

The User Library folder in which Illustrator’s preferences are stored is hidden by default on most Macintoshes. To access it make sure that Illustrator is closed and click on the desktop to launch a Finder Window (Command-N).With this window in column view follow the path User>Home folder (it’s the folder with an icon that looks like a house—it may have the user’s name rather than “Home”) and click on the Home folder. With the Option Key pressed choose Library from the Finder Go Menu. “Library” will now appear within the Home folder. Within the Library folder find the folder called Preferences and within it find the folder called “Adobe Illustrator <Version #> Settings” (earlier versions of Illustrator might just say “Adobe Illustrator”) and the file called “com.adobe.Illustrator.plist” and delete both that folder and that file. When Illustrator is next launched it will create new preference files and the program will be restored to its defaults.

The advantage of manually deleting preference files in this manner is that after you’ve reset up the program (make sure that no document window is open) to your liking, you can create copies of your personalized “mint” preference files (make sure that you quit the program before copying them—that finalizes your customization) and use them in the future to replace any corrupt versions you may need to delete.