Seems silly

They could be done as webapps, but there would be some difference in functionality. A word processor can be done as a webapp - look at google documents. An mp3 player could be done as a webapp, but there might be problems with the legality of it (what happens if you store pirated mp3s on the company's server?). Pandora might be given as an example of a legal mp3 player webapp. I think you would agree that there is a difference in the functionality of openoffice vs. google docs, xmms or winamp vs. pandora. A verse-of-the-day app is considerably different than going to a webpage for a verse-of-the-day.

The walled garden model simply reduces the choices available to consumers and developers. It might be the case that web-based apps can get around the garden's wall, but that is still going to affect how we use smartphones.