You can look at it from a physical perspective and see it as earth and sky, but you can also look at it from a theological and spiritual perspective.
In the beginning, there was but one state of reality: the spiritual in which His will was all in all. The separation of the heavens and the earth represents God’s preparation for the free will of man. By separating (but totally dividing, for the firmaments are still joined together) the two spheres of reality God allows for the possibility of man’s dominion over the earth. God gave man the power to name. We know that names are not transient when speaking of the spiritual, for God’s name is a revelation of his innermost being: “I AM WHO AM”. God gave man the power to identify the essence of a thing in this new realm of physical reality. All was in harmony until man used his power given to him by God to call His commandment about the fruit of the Tree of Knowledge false. It is here that the will of man, in his authority given to him by his Creator, comes into conflict with the will of the Creator himself. The physical reality becomes disjointed and opposed to the eternal nature with which it was spiritually created. The separation of the firmaments was ultimately a gift to man which we squandered. God did not dissolve the firmaments because he had planned its redemption through the sacrifice of His Son. He saw the destruction we would wreck upon this gift, and yet He still gave it to us out of His love for us.