Camino was a good web browser for 2002 and head and shoulders above other options on Mac until Safari was released. Netscape/Mozilla Suite was a dog on the Mac because as you say it was a secondary target. It also had much better performance than iCab or OmniWeb, including much better CSS support. IE had been good but development largely stopped so it had not kept up with the web.

I think Apple going with KHTML was a better idea than buying out another browser. They got a nice small baseline to build on rather than a lot of legacy code to refactor. Had they gone with Camino I doubt they could have gotten Gecko running on the original iPhone.