Norman remembered Pete's identity, he already knew a little about Gwen, MJ, & Pete because they were friends with Harry.
Norman was a paranoid schizophrenic, Harry was having drug problems and Norman blamed this on Pete and the others, as well as blaming Pete for all his failings as the Green Goblin, he felt that he was being victimised by Spider-Man etc etc
Norman went to Pete's apartment to attack him, but found Gwen there instead on her own waiting, he kidnapped her as collateral but during their battle he attacked her on the spur of the moment, knocking her off the bridge. Pete tried to save her but accidentally broke her neck when he webbed her feet from above.
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Later JMS retconned this with his sordid out-of-character melodrama "Sins Past" which is directly contradictory to the original story.
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