[gte910h]

iOS 5 has a far less buggy memory management system (strong/weak vs strong/unsafe_unretained). You may not realize this is a killer feature, but it is, it makes your apps function in cleaner ways, and allows more functionality to be correctly done done with less work.

Additionally, the UI is tons easier to correctly customize, making apps more colorful with less custom graphics, making apps smaller. This means more apps can be downloaded OTA, and apps can have more stuff in them before hitting the OTA limit.

Supporting iOS4 causes both of the above to be missing. I don't even want to talk about iOS 3, which makes it so you can't use ARC and Blocks, two of the things that make iOS dev much better today than it was 24 months ago.