And while I hope danny gets his username back, and it's ridiculous what happened, the value of the user account handle that danny had was created by Instagram's efforts. You don't have property rights to it the same way you own actual property or a domain name registered under your name.
...in an unfree economic system (patents and IP give monopolies) with a black box money system (money is an enclosed protocol). Cooperative Open Value Networks are the future. [1]
It's true a username isn't property, but there are some instances where merely conferring a certain status has such an enormous impact on people's lives that there are certain legal protections around it. Your job, for example.
One could argue that digital identity codes like domains and social media usernames have become similarly important. Entire businesses, extremely profitable ones sometimes, can be tied to a single username.
For more typical social media, losing a decade of pictures is pretty harmful. It’s not about the value of the @danny handle, it’s also about the account being gone. And the privacy issues if the new person got all the DMs and private info.
Post- social media, if people are backing up their data, then the problem is pretty much nil (chances that your social media account and your local storage both go kaput at the same time are pretty small).
... Until you say something verboten, that is.
We need working federated social media asap.
In the end, if you're not on whichever social media service is popular around you, you're missing out.
— Crom, Tron, 1982
I don't believe this is something inherent in Capitalism either. If I had an issue with any other kind of business the experience would be vastly different.