In this case the reason for dropping support is most likely that the only DRM they can support on that older hardware has been broken. There's no technical reason why it can't be supported, and I doubt it would cost them much (or even anything) to continue support.

Meanwhile, I can still read physical books I've had since I was a child, 40 years ago. The Kindle is undeniably more convenient than physical books, but this is absolutely an unnecessary sunset of these devices.

you can still remove the drm and sideload them

In my post I said "this kind of stuff" which also includes their DRM policies (which is the real reason they are ending the users' kindle support).

My Kindle 4 hardware works great, I still read it nightly. Since it doesn’t feel like it’s obsolete (in fact it has physical buttons so may be slightly better than a modern Kindle), it feels like a blatant cash grab by Amazon to get us to buy new devices that probably are laden with ads or other revenue generators.