I think we're basically discussing semantics here.
The actual city of Chester lies in England but the urban areas surrounding it do extend into Wales. (As the urban areas surrounding Liverpool and Manchester overflow into parts of Cheshire even if the official city boundaries do not). Essentially though, he lived his childhood in Wales, barely crossed the border to be born in a hospital in England, but could definitely have been eligible for Wales considering he spent his entire childhood in Wales and his parents home address was Welsh when he was born.
He even kept a home in Wales for most of his adult life. I know his father is English, but Owen could for all intents and purposes be considered Welsh due to that being where he grew up and spent most of his life.
I'm sure when Owen chose England, he did so, more because England were the bigger team and less because he was superficially born in a hospital in England a few miles across the border. If Wales were the bigger team I bet Owen would have chosen Wales. Owen certainly proved to be a bit of a mercenary and glory Hunter during most of his career.