Not sure I understand that answer or what "install tools on their pc" means. Here's my attempt:
WDT was written with 2 main scenarios in mind.
1) The scenario of syncing two web servers/sites/apps for web-farm/administration purposes. There are folks who just use WDT to help them setup a web-farm.
2) The scenario of producing IIS applications in a packaged form to be installed by third parties. This is the scenario that the original poster is discussing.
Why was this second scenario implemented when MSI already exists today? Well, there are some disadvantages with MSI that come up esepcially in the context of web apps. They are (in no particular order)
a) Web Applications are generally multi-instance. I can have a web app from the web gallery (microsoft.com/web) like WordPress. That app can install on a single machine to (say) 10 IIS application URLs. I could have mysite.com/blog1, mysite.com/blog2, etc. Each are instances of WordPress. This is not easy to do with MSI. MSI generally implies a single instance on the box, which is clearly not the same functionality afforded by a web server. In summary, web applications are multiple-instance-supporting by default.
b) The format for WDT packages (the apps that you see at microsoft.com/web) is such that these packages can be written without the use of ANY MS tools. They are simply ZIP files with a special manifest.xml at the root. This "NO MS tools" requirement was met because that was the only way that third-party developers (say PHP developers who work on Macs/Linux/etc) could participate in the MS web app gallery. And I think most of the PHP apps in the gallery were done without MS tools. I don't know if the same can be said for MSI? (I don't know much about MSI).
c) The WDT packages can be installed remotely such that the installer user doesn't need to be an administrator on the box. Using the remoting mechanisms in WDT, a box admin can set fine grain security policies to allow certain users certain rights. This was done to allow these app gallery apps to be installed over the net to third party hosters.
This is a long email. MSI has its place for many apps. And its ubiquitous. But for web applications, there are some deficiencies that led to the development of WDT/MSDeploy.
Hope that helps!