I think there are two other factors as why web apps are dominating client apps. The first is distribution cost. Even with AppStore and Android market, it's still very hard to get your app to the users. People browse to hundreds of different websites everyday, but very few try out tens of apps in their phone. The second factor is that the web is intrinsically a lot more connected. One web page/app can easily link to another with, doh, a link. The linking/back button semantics are well understood by all the users.