After few months of iPhone in the market, Apple announced the release of native-cocoa based SDK. This would enable all the enthusiasts to build the native applications on iPhone. I guess releasing the SDK is much better for Apple than letting people to hack and build applications for iPhone. Kudos to all the brains who have developed applications within few days after the iphone release.
Its a discussion issue that the introduction of the SDK for iphone is detrimental to the web applications that are built for safari and with a special emphasis on the iphone. Of course both have its advantages over other. A centralized web development requires no deployment and packaging mechanisms. It can be faster to develop with html and js. Developing applications with SDK can take full advantage of the application and can also overcome the entire restrictions of web-browser.
A detailed analysis is provided by Kevin Hoffman in an article from syscon.