I have a guess, and it's only a guess. There is also a space between the arm rest and fuselage on American's A330's which I have flown.
On one occasion a passenger dropped his credit cards and phone down there before we left the gate. Once they are dropped down there it is nearly impossible to reach them. Maintenance had to be called and they had all sorts of tools and still had a hard time retrieving them. I then heard the purser ask the pilot if he wanted to take a delay. Moments after she said those words the maintenance worker miraculously fished out the items.
So my guess is that the foam is there to make sure no one can drop their items down the side and lose them!