Why upgrade 1st gen iPod Touch to 3.1.3 when apps aren't available?

I just upgraded a family member's iPod Touch to 3.1.3 because I wanted her to be able to use basic apps. However, as soon as the $5 upgrade was completed, I am not finding any apps under iOS 4 that will run. My question is:

1. How do I sort apps on the App Store to find any possible working apps?

2. If there are no apps that run 3.1.3, why in the world does Apple still sell the (obviously useless) upgrade?