While HTML5 storage is good, I think the main advantage of native apps is access to hardware. Projects like Phonegap ( http://phonegap.com/ ) help you write a native app that is a website with special JS-based access to the hardware. However, if Phonegap were to release a free browser like BigFive Apps http://www.big5apps.com/ then I think they could build a more powerful web platform for the iphone and ipod that could be a great place to advertise a "web" version of your app.
The main browser would be subject to the same security as any native app, so I'm not sure how the security issues would be any different than a native application.
because native applications are usually installed by choice.
With a browser the implication (of the poster) is you could browse anywhere. Which obviously is a security risk because any page you visit has access to the Iphone API.
Would you visit a site that had that kind of access in your desktop browser?
It's not as bad as it sounds (though I gave you an upvote). You'd just have to limit the access to browser apps that have been "installed" to the home screen. I'm sure people would go nuts, but I think it could be done relatively safely.
Right, I should have said this. My point was not a browser that replaces Safari, but something that is more of a app where you could find a list of website specifically targeted to the platform.