You cannot create a device running iOS 8 using Xcode versions prior to Xcode 6.0, because Xcode does not recognize the OS on your device. For testing on iOS 8 devices, you can use Xcode 6 GM (since Xcode 6 has not yet been released on the App Store).
Download Xcode 6 GM to the Apple Developer Center .
EDIT
In @rmaddy's comment, you can use Xcode 5 to test your application on an iOS 8 device (provided that it does not use code compatible only with iOS 8+), but you must connect the device while Xcode 6+ is running and allow file processing characters from your device (this can be viewed in Xcode Organizer). Then it should work with Xcode 5.
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