After Instagram Breakup, Twitter Adds Photo Editing and Filters
wired.com
wired.com
That being said, I think good filters are quite powerful. Instagram's filter offering is much better than most free filter apps. While not the secret sauce anymore, originally I do believe it was a huge part of it. If you look at Facebook Camera and compare the quality of the filters, maybe you'll see what I mean.
What does Facebook end up getting out of having instagram in it's own ecosystem?
A good sleep at night thinking it can pull the cord on instagram at any moment.
Because at the moment, the person on the street only knows Facebook and Instagram as their social networking.
Which isn't very social, when you think about it.