Oh, I understand he wanted to keep it sacred so the ‘commoners’ couldn’t sully it with their lack of taste (see: fart apps).
But it was immediately clear that everyone wanted to program for it. And once they decided to go down that path my impression from articles and interviews is that webapps were something of a stopgap until they could get native code ready to release.
If you read his biography he had to be convinced to have users create their own apps and install them on the iPhone. He vehemently shot down the idea before he had to be convinced of the idea by Bill Campbell (the coach) when Steve was vacationing in Hawaii.
Read the book and you’ll understand more of the backstory