Maybe it was dropped for Simplicity? Maybe hardware was not on par? Power issues?
And hey, if I come with something like the iPhone, you bet I will want to milk it and have full control over it. This aint' a charity lol
Especially in the early days, Steve wanted control over the user experience.
To wit, the variability of user experience in Android OEM's and individual products of OEM's with an more open system.