This is not true. HTTP was developed for the first (graphical) web browser, WorldWideWeb. It was specifically intended to serve HTML and images, neither of which is particularly well suited for browsing with telnet.
Not sure that is strictly correct. I vaguely remember a command line browser early in the piece. The inline image ability and <img> tag came a bit later in the story when Andreessen put it into the NCSA's Mosaic browser. I've always wondered if it was that single thing that really made the web take off, more so than hyperlinking which had been around for quite a while. People like pretty pictures, especially advertisers.
