The point is to prove that you have possession of both knowledge and a physical token (hence two factor). And while sms to phone makes it seem like you are proving possession of the phone, you’re actually proving that you have the phone that texts will route to. That last bit is movable and subject to shockingly little security, hence the issue.
The SS7 (https://en.wikipedia.org/wiki/Signalling_System_No._7) does not have any authentication so anything over the telephone networks can be easily MITM'd.
And at provider's stores they are too eager to please a "customer" so social engineering is very effective at swapping SIM cards out and hijacking your number.
I don't know too much about the SMS protocol. But I do know that most protocols do start out plaintext because programmers are lazy and optimistic.