Apple has made a few pivots on its way to the cloud future, and the story of them "figuring it all out" is not that unusual. For one thing, the world was changing rapidly: Internet was getting faster and cheaper, home WiFi was on the rise, and these were necessary pieces to make cloud computing everywhere work the way it should. But before the iPhone, there still wasn't a compelling reason for most people to put their data in the cloud; the only people who did and paid for services like MobileMe (and .mac before it) were people who needed to sync files between computers. And that wasn't a universal need back then.
The iPhone (and smartphones that followed) seems to be the catalyst that gave people a reason to share data across devices. But not immediately. It may seem strange someday, but the original iPhone didn't even present itself as cloud connected--the MobileMe apps were added to iOS later. At its introduction, Apple treated the iPhone like a kind of iPod (an iPod with a music player). And you'll recall that when iPod launched, it was part of Apple's "you computer is the hub of your digital life" strategy. In the early 2000s, Apple saw all kind of devices "going digital" -- film cameras were being replaced by digital ones, videotapes were going digital, music was jumping off CDs and into these crappy little memory card players (anyone know what a Diamond Rio was?). Apple was trying to reinvigorate the Mac around being the best hub that you would plug all these devices into.
So for those historical reasons, MobileMe (and .mac) was never deeply integrated into either Mac OS X and early iOS. It was an add-on. But not for a lack of vision; Steve Jobs understood cloud computing, as did others. At WWDC'97, Jobs talked about being able to login from anywhere and seeing all his data and how that was the future. But if you think about it: we first had to get to a "digital life," before we could put it all into the cloud.
With the introduction of iCloud, Apple paved the way for deep integration between OS X, iOS and cloud services. iCloud was missing a lot at its introduction, but from the announcements at WWDC'14, it's clear that iCloud integration will continue over several years; Apple is taking its time. But it's pretty clear where this is headed: someday, it will be perfectly normal to view iCloud (or some cloud vendor) as the hub of your digital (and online) life. And there's plenty of competition for that (SkyDrive, Google Drive, DropBox). I think Apple understands this is the long game in making sure their products are still unique and compelling 10-20 years from now. Being price competitive on cloud storage is the first step, because there is nothing special about a gigabyte of Apple-branded commodity cloud storage space.
And I sincerely hope (and believe) that Craig Federighi and his team of dreamers don't stop at putting a WebDAV interface back on iCloud and becoming another DropBox or SkyDrive…or MobileMe. That's where Apple was already. We need the cloud to evolve beyond that.
EDIT: Added link to the referenced WWDC'97 video
Edited by Suddenly Newton - 6/7/14 at 6:26pm