Did you believe it when you heard it back then? I didn't.
Apple offered "web apps" to placate would-be developers and buy time to refine the real SDK and work on the App Store model of delivery. (I know that jailbreakers love to give themselves credit for the SDK, but I think that fails the Principle of Parsimony in the case of Apple, who tends not to disclose things until they're ready, and who holds user experience - which web apps do not provide - above all else.) A lot of people didn't believe an SDK was coming until it was announced, but I don't think any of them really thought it through.
I do believe Google's plan is to make the browser the centerpiece, on the other hand. Their model is to ensure a good web experience, to drive ad revenue, isn't it? Why would they add a native app API?
I'm tired of this meme. I bought an iPhone because it's a browser with a permanent 3G connection. I use gmail, google reader, wikipedia, iPlayer and many other web apps that are simply saved bookmarks. Despite the initial app goldrush the few free apps that I've installed seem to be ad supported and are generally simple enough that they would probably work fine as Html5 apps.
Obviously some apps, notably games, need native access but the initial bitching came from existing Mac developers with Cocoa experience. The big problem For everyone else was lack of access to iPhone hardware features via JavaScript.
