This error is also returned if a stripe set of MDisks has been specified an done or more of these MDisks does not contain enough free extents to complete the creation of the VDisk.
In this case, the MDisk group reports that it has enough free capacity to create the VDisk. You can check the free capacity on each MDisk by issuing the svcinfo lsfreeextents <mdiskname/ID>. Alternatively, do not specify a stripe set and let the system choose the free extents automatically.