Rogers has been offering paid downloads (billed to your monthly cell bill) since way before the iPhone, back in 2005. You could download them through any GPRS enabled phone too (back before even EDGE existed).
Many carriers ran paid downloads like this, Apple just centralised the whole thing, they didn't even invent the concept. Not to mention at first, iPhone apps were only supposed to be webapps and there was no SDK.
I remember whose times and I also remember it was pain in the ass. And so you know Apple only played web apps card because SDK was not ready, not because they believed that web apps will be enough.