* providing infrastructure for the store etc.

* worrying about sand-boxing arbitrary native code (instead just needing to concentrate on work separating the one app, the browser, from everything else)

* maintaining a public API instead of one they can change at a whim without backlash because only they use it

I don't think they quite saw the scale of the revenue stream potential of the App Store at the time, IMO people give Apple too much credit for that.

There was a big push from developers for native apps because:

* the web APIs were not particularly ready at the time (arguably some things still aren't now)

* a combination of lower CPU power than we have become used to in more recent years, and JS & layout engines not optimising as well as they do now, meant that there was a more significant difference in performance between web-app & native, particularly for games