I live in the US (Los Angeles) and there are plenty of places where this functionality (if not the form factor) would come in handy. For example, service can get spotty in underground parking structures (common in LA) making it impossible to text someone nearby to ask "where did you park?" Another place that has bad reception is Disneyland. There are no towers inside the park and the berm that separates the park from the city of Anaheim seems to block out signals pretty well, so this device would help groups keep in contact there.

While traveling, two places that come to mind where cell reception is nonexistant would be hiking in the mountains or while at sea. My wife and I bring walkie-talkies on cruise ships, but an SMS is more discreet than a chirp and speakerphone.