That was almost two years after the opening of the app store, and almost three years after the release of the iphone. I'm unsure whether they really had a fully thought out app store strategy initially, or whether they stumbled into it sort of by accident. Even if an app store was planned, I'm not sure they really knew what to expect. I seem to recall them initially saying you didn't need native apps, and then finally realizing the demand was so great (and performance too poor with Safari) that they needed to open one so scrambled to do so. That may just be a narrative I latched onto and remember though...
I wish I saved the pamphlet that Apple sent to developers during the iPhone 1 era. It was hilarious. It was all about how to use Safari to write webapps. They even highlighted how you could save a bookmark as an icon on your home screen so that your webapp launched like a native app. But of course it was just Safari.