The VC's are funding a few companies in this space on the hope that this is the future of social networking. If that happens the biggest network will be able to monetize the traffic with tag line ads, mobile ads, coupons or the like. Until then the VC's are paying the freight for all the SMS traffic so enjoy the free texting :-)
It looks like a killer app to me. There is a similar service in India called SMSGupShup which is a big hit.