Why? Because it’s short, funny, and catchy. And it’s a perfectly normal development; as the Slate article says:
But there’s evidence to suggest fail is here to stay. For one thing, it’s easier to say than failure. (Need for brevity might explain why, in Webspeak, the opposite of fail is not success but win.) And there’s a proud tradition in English of chopping off the endings of words for convenience. ... It’s also common for verbs to become nouns, Liberman points out. You can lock a door, but it also has a lock. You can bike, but you can also own a bike. There was great fuss a century ago among readers of the British magazine Notes and Queries when it used the word meet to refer to a sporting event. It’s not surprising that failure would eventually spawn fail.
I personally find the usage hilarious, but even if you don’t, there’s not much point railing against it, and even if you want to rail against it, you might as well be accurate: it has nothing whatever to do with sms.