About 18 months ago I removed support for iOS 3 and we got a huge pushback from existing users. I spent another month adding back iOS 3 support. I am sure things must be different now.
in other products which are very very non-tech consumer focused, i've seen almost zero iOS 3 deployment. You should feel incredibly comfortable deploying as iOS 5+ only at this point.
People most definitely still use older phones. I use my iPhone 3G when I travel overseas because there's an easy unlock available for it (unlike the baseband on my current model). And password manager is one of the things I really want to work across all my devices. Actually, if I can't share 1password database between old and new phones, I'll probably be looking for a different password manager. Having said that, I obviously don't expect it to perform fast on older hardware.
About 18 months ago I removed support for iOS 3 and we got a huge pushback from existing users. I spent another month adding back iOS 3 support. I am sure things must be different now.