Can someone explain to me what the point of apps like this are? Is it just for text messaging? Do people actually still have smartphone plans that don't offer unlimited texting?

People who are asking why not create one. Whatsapp has more than 100 million downloads on google play, and almost everyone I know including my parents use it. Whatsapp already has so many users I don't think they can compete with them.

Indeed, i actually forgot to mention the Chrome browser.

I'm using prepaid, I only pay if I actually use something. I pay my smartphones cash, I don't want any monthly bills. The only thing I get is a flatrate for internet (5 GB @ 7.2 mbps for 14.99 €) but I only order that Flatrate when I feel like it. There are times I don't pay anything for my phone. So to answer your question: Yes. Unlimited Texting would cost me at least 10 € a month. Not very useful for me personally. 

Google isn't interested in buying software, Google wants to buy users. Building a messaging app for Android wouldn't really attract any more users. Google already either has those people or has already lost them to Amazon, Chinese companies, and soon Facebook.

WhatsApp has users, tons of them, on many platforms.

But messaging app users can be pretty fickle. I hear the $1 per year subscription has driven tons of users to Line already.