Right, I'm aware "that changed". I'm not sure that "an entity that wasn't Instagram, say a nightclub, couldn't use your pictures on their own promotional materials, advetising, or site without obtaining a separate license from you" is really true, though. If a night club was working in clear collaboration with Instagram and published your photos on its promotional materials, that would seem to be covered by Instagram's license to replicate your content in "any media formats through any media channels", as
Instagram exercised their license to place it there.
As I said, they'd probably have difficulty operating as a blatant competitor to iStockPhoto, but I think if they'd structured things with a modicum of cleverness, their old ToS would allow them to get away with most of what's explicitly covered in the new ToS.