I would say it most certainly is suitable for low end devices, there's no other OS out there that performs as well as Windows Phone on lower end devices.
So you have to wait for devs to properly optimize their code to run on 512MB. Is it better to wait a bit for a game to be available, or never be able to play a game like it happens on Android?
I'm not a games player, but I see many complaints here about availability of games on 512MB WP devices, and unfavourable comparisons to Android where games seem to be more widely available even on cheap handsets. But I'm not speaking from experience, just what I read.
I'm also not sure that WP performs better than iOS or Android on low end devices. I agree WP is generally smoother and responds more quickly. But as I've said here before, when you consider the following process:
Step 0: User touches the screen to perform an action (e.g. touches web browser icon).
Step 1: Phone responds in some way (e.g. displays loading screen, changes colour of icon).
Step 2: Action completes (e.g. web browser is ready for use).
Trying some cheap phones with similar specs side by side, I would say WP gets to step 1 more quickly than Android (well, at least at a more consistent speed), but is slower at getting to step 2. WP's huge memory requirements, if they really are true, may go some way to explaining this.
Oh, and Android does run (slowly) on my 256MB phone. Judging by these numbers, WP won't. So in that respect, Android performs better (i.e. it works) on this very low end device than Windows.
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