No, that's not true at all. Netscape saw the potential and talked publicly about it quite early on. The details were imagined differently, but people knew that the browser would be a cross-platform way to distribute software. People might have thought things like Java would be more involved than JavaScript, but that's not the point. I can find citations if you'd like. Believe me, I was there.

This all came out in the Justice Department's antitrust case against Microsoft, too - emails written by MS and Netscape employees discussing this.

Think of how Microsoft saw the world back then. Applications like Britannica on CD-ROM were Windows Applications. Browsers were perfectly capable of displaying images, formatted text, and arranging to play sounds. That means something like an encyclopedia was perfectly possible, and it would work the same on Windows, Mac or Unix. It was clear a lot of apps could be done in a browser.

Whether an application ran in the browser or on a remote server is not the point. The rise of an open way to distribute content meant the Win32 API was going to be much less valuable, and MS would lose the control. From the beginning the browser had the potential to become a platform-independent way of delivering program content to an end user, and everyone knew it.