The creator of whatsapp cared a lot about privacy. So even after selling the company to facebook he warranted that facebook could not read the messages. That was because fb promised him that they had spent a fortune on the company but they didn't wanted to change anything(yeah, if you can believe that I have a tower in the center of Paris to sell you).

Of course, this made Facebook people extremely angry, and they had lots of arguing about it. In the end the man left (losing a lot of money in the process)and of course they can read your messages now.

They had specifically been working on that for something like a year or so. A team inside facebook was created just for that.

Messages are not encrypted by users, they are encrypted by a closed source application that facebook controls 100%. They just modify the software and force an update. It is not magic.

If you can write the source code you can do anything you want.