Visual Web Developer enables you to publish your Web sites, which compiles the site and copies the output to a location that you specify, such as a production server. Publishing accomplishes the following tasks:
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Precompiles pages, source code in the App_Code folder, and so on, into executable output.
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Writes the executable output to a target folder.
It can't just create HTML files based on your code. Think about it, the output from the code affects the HTML, therefore it wouldn't make sense to just create static HTML pages.