Is KitchenAid losing to Tesla? Is BNSF losing to PepsiCo?
These statements are only valid if you think the two things should be comparable.
The backlash is because people want them to be separate, and to serve separate purposes.
The people at Facebook controlling Instagram are making this comparison, but to me (and probably many other people), this is more akin to KitchenAid building an electric car to compete with Tesla, while simultaneously dismantling their kitchenware department.