I'm sure it won't block upgrades, but it's definitely at least a little bit awkward. I'm also wondering what apps will look like with the menu button--is there a 4th added onscreen? Then how does the hardware/software button mapping work?
The menu button will likely be handled similarly to Honeycomb (it will appear for legacy apps, and disappear for modern apps).
As far as I know, manufacturers are still allowed to include hardware buttons for now, thus old phones can still be upgraded. I expect they will phase this out eventually though, thanks to the flexibility that purely soft buttons can offer. The honeycomb buttons really do work better than the ones on previous phones (fewer inadvertant taps, easier to tap when wanted, etc).
I'd be surprised to see current phones upgraded to ICS at all, anyway, and manufacturers who choose to use hardware buttons will likely choose the 3-button Honeycomb/ICS layout.