Actually, even Apple says the iPhone 4 is the greatest upgrade they've had since the original iPhone. So you can kick the idea that the 3GS was a substantial upgrade out the window.
Let's take a look at the two upgrades:
3G -> 3GS:
Improved Battery Life
New Processor
More Memory
Compass
Video
3GS -> iPhone 4
Improved Battery Life
Better Rear camera
Front Facing Camera
Gyroscope
New Processor
4x the resolution
All new design, with improved durability, as well as improved signal
HD Video at 30 fps
Flash for the rear camera
and an extra mic for ambient noise cancellation
The iPhone 4 was basically the 3GS upgrade plus a whole TON of features. The iPhone 4 is substantially faster than the 3GS as well. Take a look at the A4 benchmarks vs the 3GS.
http://www.anandtech.com/show/3633/apples-a4-soc-faster-than-snapdragon
So again, I reiterate my point. The 3GS just wasn't a substantial enough upgrade for me at the time. The iPhone 4 adds a ton of great features, beyond just a speed bump. So I will be upgrading this time around.