Maybe the lack of a GPS? Also, the 1st Gen iPhone has the lowest-rated battery life. Maybe those two factors led Apple to drop it. Maybe iOS 4.0 consumes more power, because of CPU utilization and the experience was unfavorable.
Then again, I bought my 3G a month before the 3GS came out. Verizon screwed up their deployment of towers in my area, at a time when I was job hunting and needed to make/take cell phone calls. So I had to switch (before the 3GS was release). But again, I've had my phone for less than a year, and it would suck to have it be obsoleted/EOL'd by Apple.
They probably don't WANT to keep it around, but for customers like me, who want their device supported for more than 13 months, they kept it.
Then again, I bought my 3G a month before the 3GS came out. Verizon screwed up their deployment of towers in my area, at a time when I was job hunting and needed to make/take cell phone calls. So I had to switch (before the 3GS was release). But again, I've had my phone for less than a year, and it would suck to have it be obsoleted/EOL'd by Apple.
They probably don't WANT to keep it around, but for customers like me, who want their device supported for more than 13 months, they kept it.