I guess I'd have to side with the libertarians on that one. Yeah, it's some kind of ugly market failure, but SMS's aren't an essential service to which people have some kind of claim in a caring society, like food or shelter. Jacking those prices up is all the more incentive for people to jump at the first thing that approaches the true marginal cost of sending data.

If we could all agree to use a messaging app that bypasses the traditional SMS app, we could do this ourselves!

Not only that but, at least on GSM, it's practically free for the cellular companies.

They are sent over the same signalling protocol as other network control messages. They are only delivered in empty frames, and the networks make no guarantees about delivery. Thus, SMS messages may be delayed indefinitely when the air is busy or, under some conditions, dropped entirely. One SMS message, plus headers, takes up one GSM frame (this is the reason for the length limit).

It's actually quite the interesting scam they have going. My understanding is that SMS was a last-minute addition, kind of a "hey, no one will probably use this, but let's throw it in just for the hell of it" feature. Then it turned into a huge money-maker.