Well. Them making Noise S4-only has different motivators than the faces.
For Noise, people should be aware the Watch has been making huge strides in performance, somewhat similar to the 4s, 5s, 6s era of iPhones. It’s honestly a bit surprising Apple even still allows watchOS 6 to run on the Series 1. At this point, the Series 4 runs circles around it and then some. On top of that, Series 4 contains specialized hardware such as an improved mic for this to work. Apple has made the determination that running Noise on a Series 3 or older would ruin the experience, probably especially in battery life. That’s the other aspect to consider: watchOS is still so relatively starved in features and APIs in part because allowing more stuff would cripple battery life, which people would hate, which would ruin the reputation.
The faces are a different matter. Apple would’ve had to design them such that they fit on the smaller displays. Maybe they tried and hated it (I’m guessing a few employees did). Maybe they already have an edict that they won’t bother investing too much effort here any more. The cutoff here is clear: it’s not to punish old customers, nor is it arbitrary; it’s that the same design will fit poorly. (For watchOS 4, several reviews pointed out that some old faces fit poorly on the Series 4. We can’t have it both ways.)
The whole discussion of whether Apple wants to drive sales of newer models is… kind of tertiary to that. Of course they do. But is the Watch experience really marred because you can’t use a new face that you didn’t even know existed last week?