I've poked around some other forums on this issue. Google's motivation seems that they don't want to deal with customers purchasing an application that won't run on a particular device (e.g., a GPS or telephone app wouldn't run on an eDGe) and then demanding $0.99 refunds or whatever (since it costs them considerably more money than their margin on an app to process a refund requests). Of course, as more and more Android phones with different capabilities are being sold, they're already running into those sorts of problems.

Google in the process of developing a new "Android Market" app that will do a better job of screening devices in order to only show applications that will work. As far as I can tell, it's all speculation, but the new Market app will be released sometime this summer and (again, speculation by internet users--so take with a grain of salt) will run on devices that currently cannot access the Market.