This actually seems to me like a perfect solution (from WhatsApp's side). This way as long the user has the same phone number, he/she doesn't have to remember any credentials, which is probably the main reason (or one of the top 3) for people using WhatsApp in the first place.
And as for the "security problem", if someone has access to your phone they can just maliciously use the app itself. I'm not saying that this should just be ignored, but in this specific case the author had probably created the bigger part of the security threat by publishing the article.
An unsalted(!) md5(!) is never a perfect solution unless your goal is insecurity. The idea of using the IMEI as unique device dependant string for hash generation is good but you must make it impossible for anyone to find out how the hash is created or it is a glaring security hole (as demonstrated).
Many many apps have permissions to read the IMEI. Just as many have access to the internet. Add whatever permission is needed to find out the device's phone number and you have all you need.
I'm assuming that they (WhatsApp) were trying to make the experience as close as possible to SMS without help from the carriers, so by using the phone number (which they verify, by the way) and the phone itself as the credentials -- only one of which most people replace, and that's mostly once every 2-3 years -- is a great idea for getting users to their platform with a minimal security tradeoff, hence in my opinion a perfect solution.
And again, if an app had fooled a user for permissions to get their phone number they could probably just ask for permissions to send and receive SMS's -- which is what some banks (at least here, in Israel) use to verify online accounts.
I should have said the phone number on the same device.
And like I said in my original comment, you need some kind of access to the user for getting the IMEI (unless you work for one of the carriers, but the point still applies) so in lots of cases it would be easier to just physically do something worse on the phone itself.