When iMessage was first announced, according to news reports carriers were actually blindsided by this feature, since SMS is a known cash cow for the carriers. I absolutely agree that AT&T was able to eliminate the $10 texting plan because they could get away with it. But, for users who have many other friends with also are iPhone owners, essentially many of them would opt in to downgrade to the next tier, which AT&T eliminated (AT&T's marketing claims that the vast majority of the people are on unlimited txting plans, but there are also plenty who text less than 1000 texts a month). Regardless, $30 for texting, even 5 people, is an absurb amount of money when it costs pennies to send the data over the network.