Why would anyone pay for OnStar when you can get most of the services for much cheaper when not car integrated?
The car integration is the big selling feature, above all else. My phone can certainly hold all my music (with the right sized SD card, and a proper phone that has an SD card slot instead of some shitty phone with non-upgradable memory), and comes with a free app to play that music, or I can use other free or paid apps to listen to music if I choose. Then I could plug the phone into the car's "aux" jack (a line-in jack) with a headphone-to-line-in cable. However, messing around with a phone to choose music while driving is distracting and dangerous (and probably illegal in most places), and just not as slick as having a screen on the dashboard and some method of controlling that easily from the driver's seat while driving. So if you're the kind of person who likes a nice car and not a bare-bones econobox, and doesn't want a bunch of wires draped around, then having a nice built-in stereo system which plays from USB (preferably with a screen) is a selling point.
Same goes for navigation, except that here cars have a massive disadvantage in update costs and frequency and also ease-of-use (Google Maps is hard to beat when it comes to finding a specific business you want to go to).
OnStar, however, I don't really see the point of any more now that everyone has a smartphone. Unlike radio or navigation, features which many people make absolutely constant use of while driving, OnStar seems to only have two uses: 1) an emergency service, and 2) a concierge service. For emergencies, I have my cellphone, which will probably work fine if I roll over (OnStar may not if its antenna gets crushed). (Also, don't some newer cars now have a built-in automatic 911 calling function, provided you've paired the system to your phone with Bluetooth?) For concierge, why would I bother when I can just use my phone? No, I can't easily talk to a live operator who will reserve airline tickets while I'm driving with nothing more than a phone and a regular cellular plan, but who wants something like that besides retired old Cadillac-drivers with too much money and not enough sense or savvy to buy their own tickets online? I can't imagine there's enough people who actually want, and are willing to pay for, a concierge service like this to buy tickets, make restaurant reservations, etc. while they drive to actually make that much money for the company. Sure, someone like Donald Trump might think it's cool because he doesn't care about getting a good deal on tickets and doesn't mind paying $$/month because that's peanuts to him, but someone like that also has his own chauffeur and probably his own personal on-call concierge/secretary anyway and doesn't need a mass-market solution. I dunno, maybe there's enough Lincoln and Cadillac customers willing to pay for that kind of service, but for any normal brand, forget it. Some guy driving a $20k Ford is not going to want to pay out for that.