Sometimes it's better to forbid installs for older devices, because if you allow users to install laggy game, they won't be happy anyway, and will just leave you with bad ratings. So if someone banned your device - he had a reason.
A short quote from my e-book which should help you understand the Android API setting.
[quote:5x8k0myk]Minimum Android API
You have probably noticed that games in Google Play store have various Android version
requirements. This is the place where you can set up a minimum Android version a device
must have to be allowed to install your application. However, you cannot type an Android
version here, but you must use an Android API version. Each Android version has different
API version. The complete list of Android API versions you will find [here].