Unlimited texting plans were rare in some parts of the world. If you need to pay 9 cents per text, WhatsApp is a godsend. I even had to pay for receiving texts or pay a premium on sending texts when being abroad (which happens much more often in Europe). My understanding is that during the same time period, unlimited texting in the USA was pretty much expected. Luckily, we now have free roaming in the EU, so we don't have to worry about extra charges when using the mobile internet, but I still have to be careful when visiting Switzerland (which, again, is just a 2h drive for me).
It's really convenient for travel, you don't need to pay international rates for SMS, just connect to free wifi and you're golden. If/When you buy a local SIM card, people can still reach how they used too, they don't need to text a new number. When you change your number for some reason, you don't need to message everyone that you have a new number etc.
Because SMS is terrible as a text standard, and people want to use a rich messanger. SMS was used when there wasn't much alternative as Nokias didn't have great app support. People already knew of better things and used ICQ, MSN Messager et al. even without being technically inclined. The limitation was the platform.
It's also why iMessage hasn't taken off. We are used to things working cross platform, the iMessage lock-in doesn't interest people as it isn't providing much convenience for its limitations.
What other replies already said, plus the UX. If they could write WhatsApp (or Telegram) using SMS and their multimedia siblings (can't even remember the name) as transport, then maybe people with unlimited SMS plans could use it. But the standard SMS app UX is so much worse than the UX of those chats. Add groups and all the other features. SMS are to get notifications from banks and credit cards :-)
I add a data point on costs and volumes. I have a 90 GB monthly data cap on my phone but I have only either 100 or 1000 free SMS per month, can't remember because I don't use them. I'm probably not sending 1000 messages per month (but it's only 33 per day), definitely more than 100. I don't want to discover that I run out of messages on the 22nd of September so I won't be using them as a hidden transport in a chat app.
Hard to say, they were all the rage and suddenly just kinda stopped being used (their only purpose now I believe is 2FA, and spam). One reason I can think of is chat history syncing between devices
Wasn't it originally because carriers used to charge per SMS message? Whereas you could send a message with very little data usage, and mostly for free when on WiFi.
where i live (western europe), the telco's overcharged for sms, making a decent conversation costs euros each. Whatsapp + wifi is free.
I heard that originally sms wasn't meant to be a consumer product, it was just so technicians could test or communicate. Then the telco's realized people like texting more than calling (people prefer async sometimes, weird because comms mainly developed from async to sync), and decided to charge a limb for it.