I'll keep this short. Using Java 7 (1.7) seems to cause this issue:
Error occurred during initialization of VM
Could not reserve enough space for object heap
Upgrading/Installing Java 1.8 "JDK" seems to fix the above issue. Adding -Xmx<#>m would not fix the issue either.
Anyway, figured I'd post this since I really couldn't find an answer to this bizarre issue.