Rabbi Nathan drew a sharp line between what Israel experienced at Sinai and what the rest of the world perceived. The nations heard about the revelation. Israel saw it. That difference is everything.
Rabbi Nathan begins with (Psalms 138:4): "All the kings of earth will acknowledge You, O Lord, for they have heard the words of Your mouth." The nations of the world did hear something. The sound of God's voice at Sinai was so powerful that it reached every corner of the earth. Kings and rulers everywhere acknowledged the God of Israel — but only because they heard.
Now, if they heard, one might assume they also saw. If the sound of revelation reached them, perhaps the vision did too. Rabbi Nathan cuts this assumption off: "It is therefore written 'You saw,' but the nations of the world did not see." The pronoun "you" is exclusive. It refers only to Israel. The nations heard the echoes. Israel witnessed the source.
This distinction matters theologically because hearing can be interpreted, distorted, or denied. A sound that reaches you from a great distance is ambiguous. You might attribute it to thunder, to an earthquake, to anything. But seeing is unambiguous. The Israelites who stood at the foot of the mountain did not hear a rumor of God. They saw the revelation directly, with their own eyes, leaving no room for alternative explanations.
Rabbi Nathan's teaching establishes a hierarchy of experience. The nations received enough to acknowledge God's existence — but not enough to enter the covenant. Only Israel, the people who saw, could accept the Torah with the full certainty that direct experience provides. Hearing makes you a witness at a distance. Seeing makes you a participant.