Describe "every internal feature". As I recall the iPhone 3G only got a new radio and the GPS. The only differences between the 3G and 3GS were the camera that could record video and was higher quality, the overall speed, and the compass. There's no line. It's just I don't see why one would pay over $500 for a new screen with a unnecessary pixel density, a new camera that's just a little higher quality than the old one, and a gyroscope no one even thought was missing.
See spec comparison here: http://en.wikipedia.org/wiki/List_of_iOS_devices