I would pay for it, as much as 5-10 dollars, obviously only if all my friends and contacts still have WhatsApp as well. If they only option in the future is to have an ad supported whatsapp version and a pay version without ads and possibly additional functionality I will clearly opt to pay a bit each month. And I am pretty sure enough others would do so as well. A free version may still exist but it might be ad supported or in any other way generate revenues. One thing is for sure, which is that FB will generate revenues with WhatsApp. Do I like it, heck no, but come on lets be logical for a second, hardly any mass product that started out free is still free without ad support or the like. And if you prefer SMS texting over WhatsApp I am afraid to have to tell you that you will be a tiny tiny minority of such users, which brings us down to either a pay version or ad supported version or both.
I think we fundamentally agree on all issues, and I respect we may disagree on this. I think from a commercial mindset and Google nor FB, nor any other service has products out there that they don't generate revenue or derive other value from. WhatsApp right now is one of the stark outliers. Because WhatsApp has full end to end encryption now FB cannot harvest user data other than basic usage data. Hence the option to derive value in similar ways as Google does derive value from GMAIL is impossible with WhatsApp.