It's more than that: The Android app has no feedback at all. I have no idea even whether you're there or not. It's a complete clusterfuck, and orders of magnitude inferior to the old Google Talk app, which worked fantastically well.
If I didn't want to know if the recipient was currently online and could chat idly, I'd use SMS.
(My brain short-circuited there for a moment when trying to form a reply to a comment that was both extremely sarcastic and ludicrously wrong. Hopefully the above meets all our expectations.)
Hangouts is realtime and shows "now typing" indicators, which aren't present in SMS.
It's hard to see whether someone left, in which case better asynchronous communication should be used, or whether it's a lull in conversation.
