I assumed limera1n and therefore PwnageTool worked on every version of IOS since it is advertised as jailbroken for life.
"Jailbroken for life" doesn't mean what you think it means.
That phrase simply means that a given phone model has a security vulnerability in hardware that can be exploited in order to jailbreak it. Since the vulnerability is in hardware, Apple can't "fix" phones that have already been sold, even with a software upgrade or patch.
However, just because the vulnerability exists doesn't mean that a jailbreak exists...someone still has to craft that jailbreak. Therefore, it also doesn't imply that every single version of OS for that hardware can be automatically jailbroken with a single piece of software. The newer versions of the OS are jailbreak
able, meaning that it is
possible to craft a jailbreak for them without having to look for a new exploit, but someone still has to make a new jailbreak utility whenever a new version of the OS is released.
So all that "jailbroken for life" means is that when each new OS version is released, it's a matter of "when" the new jailbreak tools will come out for it, not "if". They still have to be custom-made for each OS version, though. In contrast, for devices that a universal in-hardware vulnerability has NOT been found, it
is a matter of "if" a jailbreak vector can be found, not "when".
In the case of the iPhone 4, the first jailbreak for 4.0/4.0.1 (from jailbreakme.com) came out before the limera1n exploit was discovered, and it used a userland-level exploit (so, one not in the bootrom/in hardware). Those kinds of holes are easily closed by Apple in software, which is exactly what they did with the jailbreakme.com exploit in 4.0.2. limera1n was discovered after that, and since 4.1 was the latest version of iOS that was out by the time a limera1n-powered PwnageTool was released, the Dev Team (wisely) decided not to waste time making the new 4.1 PwnageTool backwards-compatible with 4.0.x. Ergo, there is no way to create custom 4.0.x IPSWs for iPhone 4 with PwnageTool, because such a version was never created (although there is a PwnageTool that exists which supports making custom 4.0 IPSWs for iPhone 3G/3GS).
-- Nathan