Do you say that because of the expectation that to use a web app you have to have a working Internet connection?
[NB I'm not trolling, I'm genuinely interested, my current close-to-launch side project is a service that allows you to build data-aware HTML5 webapps for mobile devices - these work perfectly well offline]. :-)
I still wish you good luck, as most apps in wide use on the iPhone and Android simply shouldn't "have" to exist (apps for news sites, shopping carts, etc) because they can be done just as well, if not better through a web app. If you succeed, I might be able to buy my grocery shopping on my phone on the bus to work rather than being told I can't because I use Android and can't use the iPhone app.
There is no familiar way for users to install a web app (unless they are a bit tech savvy). My uncle adds favorites to its home screen to go to web pages, he knows that, and its impossible for him to think that a website is a website and if you add it to the home screen "turns out" to be like an application.
If a clearer interface was provided in the mobile phones, something like identifying webapps with a meta tag, or something, so that the phone could know and offer the user to install the app, the barrier for mobile webapps adoption could be lowered a lot.
I agree that "installing" an offline web app on something like the iPhone is a bit odd - largely because there is very little you have to do. You can just install it as a Bookmark or on the Home Screen (where it can have it's own logo etc. - like a normal app).
I'm more targeting getting structured (or semi structured) data onto a mobile device, possibly make the content editable and allow changes to be sync'ed back to the server to be shared with others or collected via an export or API.
e.g. I can take an Excel spreadsheet, turn it into an offline HTML 5 app, allow users to edit the data, sync all the changes and export it back out as a modified spreadsheet.
Call apple, ask to speak to developer relations. It's what I do.
On the other hand, I do expect my native apps to either sync or act as a client for net based services.
At the moment I use precisely zero web based apps on mobile with the exception of gmail, which I resort to only when searching since the iOS mail client search is useless.
On the point of interacting with the hardware, at least on iOS, you can get location data into your webapp and there are cunning ways of getting access to the camera.