The pivotal reason people use WhatsApp is because it can be used without paying (with money that is), and because up to 90% of people in any country use it¹.
That's it. Facebook could remove E2E today, and lose only a fraction of its WhatsApp users. Of course many little annoyances might mean that a competitor may step up, but WhatsApp is incumbent, and this is no longer about features or technology. It's all about the fact that your friends, family, and colleagues are using it. It can safely ride the network effect for years.
I welcome any protocol that makes chat something that is available for everyone with a computing device again — not just on approved smartphone operating systems.
Not to forget that WhatsApp started out without E2E and didn't implement E2E for quite a while.
WhatsApp simply won the race by being there early on and getting the critical mass. From there on out people are locked in, because everyone else is there.
I would add: WhatsApp was there, free and very well done.
Even in countries that had free domestic text messages (where the “free” factor was much less important), WhatsApp nailed group messaging better than anything else available at the time. Also, by using phone numbers they skipped the entire “create account / invite friends” stage, making for a much smoother bootstrap.
Certainly it varies a lot. But back in 2017 they had 1.5 billion monthly active users (20% of the world population). The US is probably an outlier here (I hear SMS is still popular in the US whereas I literally can't remember the last time I sent an SMS, it must be over 5 years ago)
Same in UK, I installed it as almost all my (relatively non-technical) friends and family were using it. It's much more commonly used than Facebook, or email, for direct to groups communications.