Fascinating. Within my social circles, we use Hangouts extensively. It still feels a lot like the original Talk for us. The Android app works, on desktop the Chrome extension is solid, I've never lost an important message, and the features he laments the loss of (busy status, XMPP support, off the record, contact blocking) just don't matter to us. I haven't had his experience with adding people (if I want to chat with someone, I input their @gmail.com address, done), message delivery is reliable, multi-media (photos, video) works fine, voice and video calling works, search is in the Gmail we already use, and group chats are easy and straightforward.
My social circle is almost exclusively Android, which may help, although the few iPhone users do work, and a lot of chatting happens through the Chrome extension/gmail window, so there's that.
I don't particularly want to chat through Facebook (Messenger is a busy, ugly mess, and the app is pretty heavyweight) and many of my contacts aren't on Whatsapp or WeChat. SMS often delays message sending and delivery in areas with spotty mobile coverage. Hangouts uses wifi first, which is ubiquitous in our homes and at work.
It's really interesting to see the different perspective. I do worry about the future of Hangouts, it feels like it's just coasting now. Duo/Allo/Meet may be an okay replacement, if they migrate all of the data over and swap it in Gmail. I've played with their slack-competitor (Chat), and it's interesting. Still doesn't feel as good as slack, but it's been okay.