I could not be sure what Steve Jobs had in mind but I am not too sure that he originally had a plan for an AppStore. At that time, smart phones were very specific with their applications (Symbian, Blackberry), their development was very complicated and market overall was very weak.
On the other hand we all know he believed in open web technologies (not Flash), supported and pushed HTML5 and many hoped that emerging web technologies will take over from custom and narrow solutions to more universal one (browser Java applets were premature part of thin client concept).
There is much more in HTML5 than just few tags and direct video support so to avoid quoting or interpreting, Addy Osmani (Engineer at Google working on open web tooling) made excellent post on his blog about Getting started with Progressive Web Apps.
I also recommend readers to take a look at what Service Workers may offer in this regard in excellent post by Smashing Magazine.