A big part of the reason they didn't is the reason that people dislike these fake-native web-apps; they just don't feel right.
There's two big differences:
- There was an unsatisfied need back then to move your apps and data with you as you moved to another PC. The phone moves with you.
- Microsoft couldn't prohibit Mozilla and Google from writing non-crippled Windows web browsers. Apple learned from that "mistake" and won't let it happen on iOS.