Basically, Steve Jobs didn't want developers spoiling his phone with native apps as they did on Mac OS X. However, it quickly turned out that the native apps could do a whole lot more than the glorified web apps he was proposing, and this quickly led developers to figure out ways to run native code on-device. Apple, seeing the tide turning against it, created the iPhone OS SDK in an attempt to put a modicum of control on the process.
This is the version of history I believe too, but the SDK documentation was so good that people wonder(ed) if they were planning to release it after all, maybe not for the "sell on Apple Store, we get 30% cut" developer market, but for the big software companies.
It's incredible how many people became millionaires because of them, e.g. the makers of Angry Birds. Or makers of apps like Tinder or Uber.
