Yes. From what I read on the forum this is apple's way to encourage users to upgrade their old hardware...
My iPhone 3g was rendered practically useless after ios4 was installed. Not making that mistake again!
If apple seriously think that it's acceptable for upgrades to be offered on hardware that doesn't really support the upgrade that's pushed at them via iTunes, only for users to find out later that their device just crawls along, then they overestimate loyalty...