I guess this is kinda reawakening a somewhat dormant subject (well, it's been a month or two), but I like discussions and that one interests me.
I agree that 1.1 was more important than 1.3, as the advancement of the game and the beginning of hardmode marked a HUGE change for the game as a whole; however, I say 1.2 was the biggest update, as it made hardmode more than an hour's play and added an enormous part of what we get out of it today.
In my view, the updates are based like this:
1.1 Added the first major step to the advancement of the game
1.2 Made that step a lot more important than it initially was
1.3 furthered the progress of the game, creating some epic and creative possibilities not yet possible, but long dreamed of, like fighting a boss and four separate armies all for the sake of summoning a boss that makes duke fishron look like a pig drowning in water. (lol.. really been enjoying that)
Care to dispute? As I said, I enjoy discussions.