I don't use Instagram but I think this is absolutely ridiculous. Surely Instagram has sealed it's own demise? Why on earth would I (or more likely, a photographer or celebrity) upload a bunch of photos that they can then sell without giving me any sort of compensation? Users are supposed to be grateful for the ability to upload photos online?
I especially love the part about the change not affecting photo ownerships - pay the 'owner's of the things your selling a fucking royalty then!