There were a couple things that threw up the red flags for me. Most notably was this aspect of what the service can do with your content, which also was the focus of the Gawker article:
Some or all of the Service may be supported by advertising revenue. To help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you. If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to this provision (and the use of your name, likeness, username, and/or photos (along with any associated metadata)) on your behalf.
Basically what they are saying is they can use your photos for commercial gain, without your permission. It is not even a requirement that you take a certain action, similar to how Facebook will use your likeness for pages and brands that you have subscribed to by “liking” in their “Sponsored Stories” category of advertising.
Got a snapshot of one of your ambulance crews on the scene of a fire? Instagram can use it to advertise fire extinguishers… never mind that your department now appears to be endorsing this product.
Yeah… no. Instagram‘s potential bother to actual worth ratio just skyrocketed on the wrong side. I have plenty of apps that can give me filters, and I have plenty of places to display my photos. So I really don’t need Instagram for anything.
Here’s an article on Instagram Account Deletion should you choose to part ways with them as I have.