I had a hunch nobody at Instagram was really that stupid. This sort of thing happens every few months: someone reads the fine print of Google’s terms of services, or Apple’s, or Microsoft’s, and discovers what seems to be an outrageous “we own you” statement buried in the legalese. Google, or Microsoft, or Apple, apologizes, saying, “That’s not what we meant — that’s just what our lawyer put in there, and we’ll change it.” And life goes on.
Pogue has a good summary of what's happened so far and how this has all happened before with other online services. Instagram posted something stupid to their revised Terms of Service and we all (me too) probably over reacted a bit. They're now backpedaling but still haven't said anything substantive.
I like Instagram. It's the best service I've found so far to let me publicly share photos. I don't use it for anything personal, I understand everything I post is available for the world to see. I also understand they're a free service for me to use so they have to make their money somewhere. That means advertising. I just don't want a photo I take of my home office to end up in a sleazy "make millions while working from home" ad. That's the real fear here. Go ahead, sell advertising, make money, just don't use my pictures to do it, or if you must, give me an opt out switch, okay?
I'm going to stick around Instagram a bit and see how this all works out, I hope it does. You can find my stuff here.