I'm not quite sure why so many here go by the mantra, specs don't matter. But then at the same time, so many have upgraded to the iPhone 4S. And what exactly is the difference between the two? Specs would be the difference. Of course specs matter. Specs refers to hardware, and if you don't update hardware, you can't update software. It's quite simple, if specs didn't matter, why would so many reviews say the 4S feels a bit snappier than the 4 running the same OS. Of course specs matter. If your enjoying a better camera on the 4S, that's specs. If your enjoying your snappier 4S, that's specs. In fact the 4S is described as just a 4 with a spec bump. Maybe I'm missing something, but it seems more than obvious that specs matter.
That's a little too much logic in one paragraph for the fanboys to comprehend. It's extremely clear to Apple that specs matter, otherwise the 4S would not exist.
And your absolutely 100% correct that software cannot move forward if hardware does not allow it. Hardware = Specs. Notice how nobody explained to you why the 4S feels snappier than the 4. It's because of the new and better processor. That would be better specs. Proving specs matter.