I don't think they did nothing, but I think that they thought that more people would use the iPhone where there was WiFi and that would relieve/share the burden on the network.
That has not turned out to be the case, most users I know, stay on the ATT network all the time, and seldom change to a WiFi Network, as most of the ISPs have blocked or impeded WiFi deployments in most cities.
Cablevision's WiFi »
www.optimum.net/WiFi/Find is one of the largest deployments in any area with no extra cost to CV customers (75% of footprint), but is not fully contiguous and doesn't cover Manhattan the center of CV's footprint since that is TimeWarner territory.
Meanwhile, everyone complains that as an example, Germany is already covered by the higher 3G+ but it's only the size of Montana. If ATT only had to cover Montana, it would be done here, too. Why is it that no one appreciates the scale of things here?