not necessarily.. in instagram prefs, if you have 'save original picture' ticked, the picture will be saved in your photos with the device's standard aspect ratio..
(though there's still a little bug in there because a photo shot in landscape with the instagram camera will display properly on instagram but it's saved vertical in the photo roll)
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i think it's just their (the original devs) thing.. sort of like polaroids and holgas are always square.
but there are quite a few apps out there that allow you to upload any shaped frame or aspect ratio to instagram.. its a few extra steps though