The updates weren't free. iPhone buyers paid for them, just as iPod touch owners did.
Wait, what? We did? *scratches head*. I have an iPhone 3G. I don't remember paying for one update including the one that was a few weeks back.
I'm quite confused. When did us iPhone buyers pay for an update?
Oh, and I'd like to say that I can easily understand why a company would want to eventually draw the line and say we are no longer supporting that platform.
1. Time = money. Paying people to program = money + time. The more devices you have to support the more money and time you have to throw into making sure they all work properly.
2. The more devices you have to support the more chances one of them is going to be buggy with something. More chances to spend time and money. Yay
3. You will be limited by the capabilities of your least capable device you want to support. If you want to be able to go further ahead and use the potential of current devices, well, old devices are going to hamper that since their potential is less. So if you want to use more potential of new devices, you can't let yourself get too limited by capabilities of old devices.
4. Yes, you do want to encourage people to upgrade. They're not a charity. They're here to make money. It's called business. It's called they exist to make money. Be realistic here. They're not your friends, they're not a charity, they're not here to make you happy, they're here to get your money. If they are making you happy, it's only cause it is good business sense for them to do so and ultimately will make them more money. In the end, this is what it boils down to, what will get them more money (and if they are really good/smart, they'll make decisions that may in the short run not be so good for them, but in the long run work out for them. So they can look like they are being "kind" but in reality they are just building more loyalty and more chances you will come back to them and spend more money than the little bit they look to be conceding to you at the moment).