Is such a low cargo carrying capacity possible?

Does dry weight include the propane? It's only a concern depending on how you plan to travel. Full water? Then you need to account for 300 lbs of water. Plan to haul around your gray water? Another 500 lbs. Haul a full tank of poo? Another 250 lbs. unless you plan on boon docking and hauling full tanks then should not be a problem.

Staying at campground with full hookups or even a dump station you should be able to make this work.