First: Titanium provides much more than a WebView. If you planned to display only web pages you maybe should have a look at PhoneGap / Cordova which might fit your needs in a better way.
As you've noticed not all browsers support HTML5 Caching feature as expected. I can't say if it doesn't work for Android in general or only for your specific version because WebKit usually does support it but it depends of the used WebKit version. And this could be different.
EDIT: It seems that (in native android) this feature can be enabled as written here: Application cache in HTML5 doesn't work in Android PhoneGap application. This is currently not possible in Titanium (there might be inofficial tweaks i don't know but from http://docs.appcelerator.com this is not possible).
Personally i'd prefer another solution. Cache data by myself and display it if there is no network connection. But this depends on what you try to achieve. Having few content which doesn't change often this would make sense. Having dynamically changing data (like twitter stream for instance) this would be difficult. Also it depends on your users and where they want to access your app.
And there is an open question: When you want to use all the caching features why do you want to create an app? Creating a simple mobile webpage would do the same job. When creating an app i wouldn't use the Caching Features of HTML 5. You should keep all the static resources in your app and simply load data from the network. This can be achieved by both Titanium and PhoneGap / Cordova. Titanium is more useful for a native UI and some native Features while PhoneGap / Cordova would be more appropriate for HTML5 based layout.