I'm just getting into development with Apple on iOS and I'm curious about the history.

When the iPhone was first launched in 2007, Apple didn't have an App Store in place. Perhaps it wasn't in the cards, or perhaps it wasn't ready, but Apple wasn't planning on allowing developers to build native apps for the iPhone. At least not initially. Instead, Apple encouraged developers to create applications for it by building web-based apps that would be accessible through the Safari browser on the iPhone. The results of this can be seen when you go to a "mobile" version of a website.

As we all know, Apple eventually opened up development for native apps when they released the SDK for developers the following year.

What I want to know is, why did Apple not want developers creating native apps for the iPhone? Was it for security reasons? Was Apple not ready for it (no business model/system in place)? Was Apple just overly protective of it's iOS platform/product? Or did Apple imagine a future where people were going to develop rich, cross-platform, mobile web-based apps, perhaps with HTML5, so they didn't bother with allowing developers to create native apps?