My Galaxy S is running 4.2.2 including fully functional Google Now. Good luck getting a feature complete version of iOS 7 on a iPhone 4.
And? It doesn't run very well. I have a Nexus S and unless the Nexus S and Galaxy S are vastly different devices, it's a night and day difference going from a Nexus S to a Galaxy S2 to a Nexus 4.
This is my experience with 4.3 because I ran 4.3 on all 3 devices for comparison back in September 2013. Similarly it's a night and day difference going from iOS7 on an iPhone 4 to a 4S to a 5.
You're right however that you do get the full featureset on an older phone like the Galaxy S, but that phone has been sluggish to begin with. If anything, 4.1 and 4.3 made the experience a lot better on such a lagfest phone.
Your focus is on what's worth Apple's time, my focus is on what's worth consumer's time and money.
I've seen too many people with iPhones (still know a bunch of them) that cling to some old model of iPhone, because they are waiting for an upgrade they actually consider worth it, not just an incremental step. I know people right now waiting for the iPhone 6... just like many before that waaaaaaaaaaaaaaited for the iPhone 5.
With Android, I've gone from my SGS3, to a Note 2, to a Note 3 in the same time as I've known iPhone users to cling to the same model because they know it'll be years before something that's truly new that's a major upgrade comes along. Nothing was wrong with any of the phones I had before- I just wanted more, and Samsung (plus a decent selection from other makers) makes it possible not to feel stuck with the same thing for year after year.
I like iPhones, I think they're very nice phones- I just think Apple is way too stingy with their upgrade cycle, and I think their fans have fallen into a trap of being way too permissive and excuse-making about it.
Comparing YOUR upgrade strategy with your buddy's isn't exactly fair. If you think that Apple is not upgrading its phones enough then it should've fallen far behind already and been stuck in the stone age. The fact is today's iPhone still does a lot and I say this as an iPhone 5 user. I agree Android's made big strides forward, but one can argue there aren't that many changes going from phone to phone either. A lot of it is in the software if you compare each revision of the Galaxy S phones. Other than larger screens and faster hardware, what are we getting really?
In many ways, I know people who held onto a GS2 and waited for a GS4. It's not that easy to say it's Apple or Samsung or anyone's fault that they're waiting to upgrade for something bigger. It's the nature of technology. You're not going to trade your 2012 car for a 2013 car unless it's a total redesign, and even then that's a bit excessive unless you're rolling in cash. People wait for big changes. Furthermore, given the US model of upgrades is based on 2 years, I'm not surprised at all people skip 1 iPhone generation. You upgrade your phone because you're an enthusiast. I went from a Nexus S to a GS2 to a Nexus 4. In retrospect, the GS2 was unnecessary. Do I blame Samsung now for being stingy? Technology sometimes doesn't move that fast to justify rapid upgrades like that.