I am quite confused regarding working of hybrid e-wallets..If private keys are stored on user's browser, then what is the purpose of involving a hosted web service... Can someone please answer my query ?
Generally web wallets have you store the keys on your computer, because otherwise they would have control of your Bitcoins and could run off with them.
The reason you need a site is because you can't broadcast transactions to the network without a full node, something that is running on the site's servers.
Web wallets of this type allow you the best of both worlds, you do not need to run software on your computer, and you retain control of your coins as the server never knows your private key.
The hosted web service provides a means of accounting over your transactions or can even provide one or more private keys in an m-of-n multisig schema (say 2-of-3) so that neither the web service provider nor you have full ownership over your funds, so if either gets compromised your funds will not be stolen.