> It just makes it easier to manage SMS and Hangouts conversations side by side through the same app.
No it doesn't, it's actually quite confusing. At some point I sent a message to my wife, without paying attention if it's SMS or not and so I sent it by Hangouts because that's the default, but she's not using her Google account at all and never received the message. And you have to pay attention like every single time.
It's much, much easier to separate services, when they are in fact different. For SMS, I open the SMS app and I send and receive SMS messages. For Hangouts, I open the Hangouts app and I send and receive Hangouts messages. When I'm not sure what protocol to use for somebody, I go to that contact's details and check out the available options. If I have to read new messages, I click on the notification. If I want to reply to a new message, I'm already in the right app. What could be simpler than that?
Trying to combine Hangouts or any other SMS alternative with SMS in the same app is first of all a huge usability fail - unless that service would fallback to SMS in case delivery didn't happen, in which case there's always the question of unexpected billing, because your phone number is going to have to send that SMS and SMS can get quite expensive - so no, it's an epic failure.
Its popularity has been declining due to Facebook and Android - Facebook on Android works really well lately, most of my acquaintances are on Facebook already and everybody with an Android (which is most of my acquaintances) has either Facebook or Facebook Messenger on it. This is happening because Facebook is the messenger that finally dethroned Yahoo Messenger in my country - really, I'm serious, Yahoo Messenger was still really popular until about 2 years ago. And Android penetration has been phenomenal, due to cheap models being advertised by mobile carriers and sold instead of feature phones.
> Their logical endgame is to move all messaging to the Hangouts protocol, and fall back to Google Voice to deliver messages to users who don't have a Hangouts client.
You're a US citizen and so you might have missed the part where Google Voice is not available outside the US - no alternative can win over SMS, unless it is international.
I actually hate them for trying to take over my SMS messaging and I'm glad that I still have the option of not allowing them to do it on my Android, even though I'm also a regular Hangouts user. What is it with these companies trying to be everything to everybody?