Signal never used SMS as a transport. It only provided a UI to have unencrypted SMS messages alongside Signal chats. As far as Signal messenges themselves go, phone numbers always were an arbitrary ID string.
Having a username that isn't a phone number would have only more clearly segregated the SMS feature from Signal chat; and the desire for that segregation is one of the key excuses they came up with for dropping SMS support from the Signal app.
Signal is a merge of the TextSecure and RedPhone applications; back when it was still called TextSecure, it did use SMS as a transport for encrypted messages.
of course they could have, but it would have made for a more complex UI and add potential confusion to users. nothing that would be a serious problem that could not be overcome, but any of these things are tradeoffs. cost, complexity, etc.
SMS wasn't removed to make way for arbitrary user IDs. that would have been surprising even though i prefer IDs over SMS support. but if SMS was on the way out already it made sense to wait with implementing arbitrary user ID support until then. and now they have one less excuse not to implement it
Signal never used SMS as a transport. It only provided a UI to have unencrypted SMS messages alongside Signal chats. As far as Signal messenges themselves go, phone numbers always were an arbitrary ID string.
Having a username that isn't a phone number would have only more clearly segregated the SMS feature from Signal chat; and the desire for that segregation is one of the key excuses they came up with for dropping SMS support from the Signal app.