2. WHY buy when you can rent or rebuild. Honestly, how hard would it be to recreate an instagram? I don't THINK that instagram owns any patents around either their delivery or their SECRET SAUCE of vintage or filtered photos. Other company's are already starting to do this with both pictures AND video. Did they land on something interesting with filters, yep, but other than that it is replaceable.
Why reinvent the wheel when you can buy the wheel? Instagram has over 30 million users. This was probably before Android users around the globe get familiar with it. Even more so now that it's all over the news. That 30 million is likely to be 50 million in a couple weeks, if not days.
It would have been stupid to put a lot of R&D into something that they could easy buy and refine. Adding video and increasing the features of what's already in place is sure to happen. Granted it will become far too commercial now, but it'll can't get any 'worse'.