Instagram does not have ownership of any of the members' photos because they're private and should only be viewed by people you know unless they pay you for using your photos on ads, etc. We have the right to receive something out of it. Plus they should not have even done that policy in the first place without us approving that term first.
Instagram does not have the right to claim ownership of their member's photos. The fact is Instagram is just a site that hosts pictures, and should not own their user's pictures. The pictures belong to those who took them, and unless they are compensated in someway or release the rights to them they are still the user's property.
Instagram is free to join, and there is no contract to sign that states that photos on the site will become the property of Instagram. To take someone's photos and use them without permission is wrong, and Instagram should resolve this quickly. Also, if the company wants to use a photo that belongs to a user, some form of compensation should be offered.
Instagram is a free service for those who join. Saying they have the right to claim ownership to members' photos is like saying Facebook and Twitter would have the same. Instagram is not a freelance writing site where its members are contributing something to them and receiving something in return.
If I post something on a public forum, everyone reads it, as this is now. In the case of a photo I took, that Instagram may profit from in some way, I believe they should offer that member a small compensation for that photo, much like micro tasking sites offer for small jobs done.