I'm not sure if the sms cost was the reason, at least in my fuzzy memories. I think by the time whatsapp showed up I had already had unlimited national sms for a couple years.

However, sms is extremely limited and mms is crap.

Whatsapp is text messaging that works.

iMessage is useless because more than half of your contacts have Android. Plus it's less intuitive and has fewer features than WhatsApp. Possibly because it's designed by americans used to the dark ages of sms :)