I ONLY update programs through iTunes. When it sticks the old version in my trash, I grab the ipa and put it into my "backups" directory.
I've known way too many people who have been burned by things like "ugh, this version doesn't work on my phone, but I have no way to get the previous version!"
Also, there are cases where a feature is removed from the new version, thus making it useless. My system helps fight against that.
That's exactly the method I use as well. There's one app that I use that an old update adds advertising, and breaks most of the functionality. Based on the reviews, further updates do nothing to improve the broken bits, and made the advertising even more intrusive.
I see no need to update a perfectly functional piece of free software and turn into a crippled piece of ad-delivery-software.
If I get careless and hit the "update all" button, or get click-happy in the list of updates, the old version ends up in the trash can. If I still don't catch it and dump the trash, I can still go back because I've got the old ipa sitting in my "Old IOS Apps" directory.
There was one game that I had (Clickomania HD?) that went from a full version that cost money to a free version with 3/4 of the functions removed and ads added in one update. It's been sitting in the "hey, update available!" section of my iTunes for close to two years.
I've known way too many people who have been burned by things like "ugh, this version doesn't work on my phone, but I have no way to get the previous version!"
Also, there are cases where a feature is removed from the new version, thus making it useless. My system helps fight against that.