SMS as a second factor is not a net reduction in security. The ability to hijack a phone via number porting or similar could give access to SMS messages, but by definition a second factor should never reduce your security.
What does reduces security is the use of SMS as a password reset mechanism, or any similar method that uses SMS as the only factor for authentication. Don't do that.
It gives users a false sense of security and providers an excuse not to implement something better. Most (all?) of those who only support SMS 2FA also get the part about no resets wrong.
What does reduces security is the use of SMS as a password reset mechanism, or any similar method that uses SMS as the only factor for authentication. Don't do that.