It'll work, but it really depends on what you're going to be developing. Typically, software development isn't incredibly demanding of hardware. Unless you're going to be writing massive programs, you can get away with fairly light hardware such as the 2010 MBA. If you're writing massive and complex programs in the future, you'll likely also be making good money that you can use to purchase a new system as needed.
Since you're just starting out (from the sound of it), I think a MBA as you describe is a good system for you.
One caveat: If you know you want to peruse 3D software development, look at the MacBook Pro 15" as you'll likely need a much more capable GPU than the MBA or MBP 13" provide.
