There are two OS versions that are important for an app: the minimum version it will run on and the version it can use features from. So, an app can run on iOS 4 but use features from iOS 5.
There is an overhead for developers to maintain compatibility with older versions of the OS and some may choose not to. The older versions are a shrinking proportion of the market and a trade off has to be made between supporting (and testing against) old versions. In most cases, users on older OSes have devices that are able to run newer versions, they just haven't upgraded (or even know there is such a thing as upgrading).
iOS 6 is a slightly different situation because, as you said, it will not work on iPad 1. For apps that are optimised for iPad (rather than iPhone apps that just run zoomed up), developers are very aware that they would be losing potential customers if they upgraded their apps to require iOS 6. But there will come a time when the overhead of supporting older versions is not worth the effort, especially for apps that required a single one off purchase. How much continued support do you believe your 69p (or whatever) entitles you to?
Should developers be expected to support the shrinking population of old devices forever? The iPad 1 has not been sold by Apple for over a year. In my opinion, they still exist in large enough numbers that most apps will continue to support iOS 5 for at least another year. But one by one, the developers of the apps you use will leave you behind as they focus on the growing number of people with new devices. That's just the way technology moves. There have to be painful "breaks" with the past to progress as quickly as things have moved over the last decade.
