alt Hacker NewsI never got the impression that it was any kind of attempt to match iOS or "boost engagement". It's simply that the Mac App Store was brand new, and it was time to phase out DVDs as the primary distribution mechanism.
They did sell USB flash drives with 10.7, but it didn't make sense for that to be the primary distribution method.
OTA updates were delivered through System Preferences for many years before the App Store, not on DVDs.