That and, you know, Microsoft.
Notes followed a similar pattern, with a proprietary "post office" system with optional gateways to larger x.400 / SMTP / UUCP / OfficeVision networks for those who needed them.
Going SMTP (or even x.400)-native from the start might have been a better choice in the long run, but that's only clear in retrospect - it certainly wasn't obvious at the time.
It's hard now to appreciate how different corporate IT was from the free-wheeling Internet world. The unexpected popularity of the web really did change everything.
Plus just how much SMTP sucked compared to other systems and only got enough kludges barnacled onto it in semi-transparent way by late 1990s
Even if your typical big company did have a gateway for their internal email to other companies, odds are very few people used that gateway for business. If you wanted to communicate with somebody in a different company you dialed the phone or sent a fax.
The Notes directory was based on X.500 - it had the same attributes etc. Notes didn't implement DAP, but then almost nobody did, which is why we got LDAP.
There was an add-on connector for X.400 mail. I remember installing it a couple of times. It was fine, if cumbersome due to the nature of X.400. ;-)
They also didn't ignore SMTP. There was a connector for it for Notes 4.0 and 4.1, and starting with Notes 4.5 that connector was bundled in the box. Starting with Release 5 they retired the connector and moved SMTP functionality to be native in the mail router process, and for security they provided a separate SMTP listener task. Both of these were configured in the Notes Directory via Server Documents and Configuration Documents, just like any other feature of the server. If a Domino server wasn't sending or receiving SMTP, it's because its administrator didn't want it to, not because it couldn't.
It wasn't a walled garden, or if it was the wall was very low. By comparison Microsoft's first attempt to dethrone Notes - Exchange Public Folders - was a completely walled garden. And a very well fertilised one which people avoided due to the smell.
But it's OK, Microsoft then gave us SharePoint. The fact that Microsoft's customers rushed to it tells you how bad Public Folders were. So your comment "That and, you know, Microsoft" is much closer to the truth than protocol support.
(Source: I was a Principle Certified Lotus Domino Administrator for multiple versions, and have used & administered Lotus Notes versions from version 3.33 through to 8.5. I worked at a consultancy and installed many, many implementations of Lotus Notes across a number of topologies. I also had an Exchange Server MCP and worked with multiple versions of that too.)