The latest iOS Development tools (as of mid-September 2012) no longer support iOS devices running a version below iOS 4.3. So apps compatible with devices that can't run iOS 4.3 drop off a cliff as developers update their apps using the current Xcode, which use is required to fully support the iPhone 5.
Some developers support only down to iOS 5.1, as that's the highest supported OS for the 1st gen iPad.
Warning: If you have apps for such older iOS devices on iTunes on your Mac, don't update the apps unless the required minimum OS is appropriate. Or make backups of your iTunes library before you update. iTunes will throw working versions of apps in the trash after downloading a recent update, and may even delete these apps off of your older device (which is very bad).