No it is very possible, I did it for the iPhone 3G, 3GS, 4 and iPad, dont get me wrong, it gave me a month long migraine, but it is possible even more so now with FlashBuilder 4.5. Basically the iphone 4 has twice the resolution of the 3G and 3GS, so complete different assests where needed for the higher resolution, but these HD graphics could then also be used for the ipad.
If your going to be releasing for Android you have no choice but to take this into consideration, there is a vast array of screens sizes and dpi devices within that channel.
Doubling the size doesn't slow it down, it's done withing the hardware and Flixel uses this to great effect, it's how they get the retro look to their games. 
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