Hangouts UX sucked big time. I remember lots of frustrating sessions with my parents about why video calls weren't going through, or how can some random family member join our family thread when they don't have a Gmail account etc.
You definitely had a rougher experience with it than I did, but my main point is Google launched it, didn't seriously iterate on it, and gave up its strongest distribution channel at the first sign of pressure from carriers. Since they keep launching messaging products, I must conclude they want to be in that space and it was foolish of them to squander their best opportunity.
Funny because now it doesn't. It routinely fails to surface emails that exist.
couldn’t believe they had fallen for an April fools.
But that was a limited time window when gmail massively outweighed the 10-20mbit of things like hotmail with effectively unlimited storage.
This is all anecdotal of course. Maybe it wouldn't have worked, but how quickly they gave up was weird.