Kevin Roose is puzzled by the Instagram backlash:
Instagram is a business, not a public utility. You were given access to it for free, and it currently has the financial weight of Facebook behind it, but Instagram needs to make money at some point, or else it will cease to exist. Think of it like a 30-day software trial period. Eventually, that period has to end. And when it does, it only has a few options for charging you, one of which is direct (making you pay $5 or $10 a month to belong), and the other of which is indirect (keeping it free for members but making advertisers pay for licensing). You may not like that Instagram is choosing option B over option A, but realize that it had to choose one or the other at some point.
Nilay Patel explains exactly what Instagram can and can't do with your photos:
The company can't sell your photos, and it can't take your photos and change them in any meaningful way. So what can Instagram do? Well, an advertiser can pay Instagram to display your photos in a way that doesn't create anything new — so Budweiser can put up a box in the timeline that says "our favorite Instagram photos of this bar!" and put user photos in there, but it can't take those photos and modify them, or combine them with other content to create a new thing. Putting a logo on your photo would definitely break the rules. But putting a logo somewhere near your photos? That would probably be okay.
His bottom line:
[T]he real lesson here isn't about the legal implications of Instagram's terms of service — it's about how little we trust Facebook to do the right thing.