They are lucky to still be in the App Store. Instagram's lawyers have been sending cease and desist letters to anyone using their trademark "Insta". Even apps with words that start with "Insta", like Instant.
Instagram has their trademark since September 2011 (http://tmsearch.uspto.gov/bin/showfield?f=doc&state=4808:v4h...).
So no, Instapaper is not "lucky" to still be in the App Store.
Don't assume that because Instagram is well-known that they have more seniority and the rights and abilities to do whatever they want.
Though it's easy to assume in this day and age.