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No it wasn't. The img element was not added to the standard until HTML 2.0

Images and other media were supported from the start, they just opened in separate windows instead of being inline.

The first browser ran on NeXT, graphically. It did not grow out of the terminal. And the very first publicly formalized definition of HTML in 1993 did already include the img tag:

https://www.w3.org/MarkUp/draft-ietf-iiir-html-01.txt

OP never said that the web was terminal based. He said it was text-based. Text should render fine either in a terminal or on a graphical canvas.

That doesn't necessarily hold true with rich text, though...

Heading formats can be well represented on an VT320. HTML didn't have color text at the start.

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