I sold my two-year old iPhone 3GS for $200 this morning. 10+ emails within first 30 minutes of my post on craigslist, gone in a half day.
I don't know why it is crazy for a two generation old iPhone. I asked the buyer what he wanted to do with it. He said he gives to his sister abroad. I reminded him it can't jailbreak because I put the latest iOS. He said no problem at all.