As a developer, what if I don't support iOS 3.1?
You can find Marco Arment's stats on iOS version he collected from his Instapaper app (as CanuckSkier say in the comment, Instapaper is generally used by tech-savvy people, so "real"-people usage might be slightly less).

Here's a graph: 



As you can see, at least 98% of users are already on iOS 4.0 and 96% on 4.2. So I guess you can safely stop supporting iOS 3.x.