The iPhone 3GS was a much needed stop-gap between the iPhone 3G and the iPhone 4. It was so much faster than the iPhone 3G, that pretty much anything the iPhone 4 can handle, the iPhone 3GS can still handle adequately to this day.
In all actuality, the iPhone 3G should have been what the iPhone 3GS was from the get-go; that would have resulted in a lot more satisfied customers over the long term.
As you may have noticed, when more and more iOS updates were released, the iPhone 3G became slower and slower, leading to numerous consumer complaints. This is a testament to the fact that the iPhone 3G should have been released in the form of its beefed up big brother from the very beginning...