Does make any sense today, with the incoming iPhone 5, to test apps on old 3GS iPhones or older devices?
Is the simulator enough for a basic app not using OpenGL that runs smootly on iPhone 4???
Can you share marketshare or stats about old iphone / ipod models?
If you are not going to support the older device, be sure to set your deployment target to ideally match the version just after the maximum iOS version allowed for the non-supported device. In this way, it shouldn’t be installable on a device you are not supporting. Just my 0.02 cents.