Filed in the Superior Court of California for San Diego, the lawsuit claims Apple has received thousands of complaints from iPhone 3G and iPhone 3GS consumers about the problematic upgrade. Apps reportedly take longer to open, the phone calling interface hangs and crashes more than usual, and users have to frequently turn the device off and on to fix issues.
It's unlikely that Apple is as evil as the plaintiffs claim; the company probably just didn't test iOS 4 on older phones as thoroughly as it should have. Nevertheless, the lawsuit makes a good point: Apple does not allow for those users to download and reinstall earlier versions of iOS. The only way to do so is to jailbreak the iPhone, which of course voids Cupertino's warranty.
Having just one version makes it easier for Apple and developers to target the mobile OS when testing, maintaining, and creating apps. Nevertheless, it's an annoyance for consumers as it limits their options. If you don't like the new version, whether that's because you find it buggy, slow, incompatible with your apps, or you just plain don't like it, you should be able to roll back.
Technology-based class-action lawsuits rarely succeed so this one likely won't make it very far. That being said, it may force Apple to make downgrades as easy as upgrades, so it might not be a complete waste.