My cellphone plan gives me unlimited SMS but only 2 gbs of data. If unlimited really means unlimited, then my data comes to me for free (assuming I was going to keep my sms package regardless, which I am).
Unlimited never means unlimited. It means the seller of the service thinks there's an effective limit to what most customers can consume and he thinks he can provide more than that for a flat price.
This generally works out well until people figure out creati e ways to consume levels of service beyond the effective limit -- then the service provider is oversold, and it's either underdeliver or invest in living up to new demand (probably financed with a price increase).
See also "salad stacking".
That's only in some countries (eg: US). In other countries, SMS is way cheaper for example, for the cost of a dollar or so, you can get a plan that allows you "unlimited messaging" or some obscene number of messages per day (more than you can reasonably type). For example, I know this was the case in India as recently as a couple of years ago -- and then they capped it to try and stop telemarketing spam.
So there are definitely places where SMS is cheaper than data access. In the US it's inverted purely due to the business model choice of the carriers.
In some countries (like mine), WhatsApp is not popular at all because unlimited SMS is cheaper than unlimited internet. We've had unlimited SMS for a long time now.
For all of those countries where maybe the best speed for internet is EDGE or GPRS, but where SMS are cheap, if not unlimited, this service is huge. I don't think the target is rich western world with LTE.
SMS is the most expensive data service on the planet. It costs more per byte to send SMS then it does to send data to Jupiter (factoring in the space ship you had to launch there to receive it).
WhatsApp's entire business model is based on the fact that SMS is just stupidly expensive.