Only until that nasty message appears: you must have iOS (whatever the then current version is) to use this app. Now you're screwed. I've been there and its not long before the frustration of being locked out gets horribly maddening. Apples the master of taking huge piles of money.
While Apple may indeed be a master at parting us from our money, I don't see how making us upgrade iOS is an example of that, seeing how iOS upgrades are free.
Back to the topic, I have an iPad 3, but am looking forward to the 5, just because it is supposed to be significantly lighter. I love my 3, but it can get heavy if I carry it with me all day.