I don't agree with your take or arguments, and you seem to keep branching off pejorative comments on their organization and product instead of actually discussing the points. I think the conversation would be more productive if we focus on the same point, i.e.:
* Focusing on what matters most is a good idea, as nobody serious about secure messaging uses SMS
* Your argument: irony-covered "dropping features is not a good product development approach".
* My counter-argument: it **is** a valid approach, why support a feature that was useful in the past, but it is now dying/not aligned with your core value proposition?
* Your other argument: their focus is on social networking, and some disdainful comment that "the competition already did it".
* My argument: how is catching up with well-established user behaviors across other messaging platforms a bad thing?
I remember when I didn't have a smart phone (I don't come from a privileged background, and this was 2009) and I used twitter over SMS. I really wouldn't care if they dropped support for it now, but back then, I would have churned.(edited for formatting)