Specifically, how is his example of a celebrity's silly picture being used by Instagram to advertise a silly product plain wrong ?
I also fail to see how he comes across as entitled in his post. He's merely expressing a concern, one that, at face value, seems to be pretty valid.
To me is seems like the ads are going to be more along the lines of promoted restaurants and/or venues using photos the people you follow have taken. IG basically knows where everyone goes based on people voluntarily tagging images, and can now serve ads based on that in the same way FB serves ads from pages you like.
An ad that says, 'Your friend recently went to X (with a photo they took at said venue)', is a pretty engaging advertisement in my mind.
To the contrary, I thought the theme of his post was specifically that he didn't know how Instagram's new policies would effect personal privacy, and that lack of understanding concerns him. When pondering the implications, he even goes as far as to ask whether a worrisome, fictional scenario was even a possibility rather than insisting that it would happen.
Where do you think he expressed a sense of entitlement? He's not a user of Instagram, so I didn't get the impression that he thought Instagram owed him something.
I think his whole post is a lead in to an excellent point: in the "social web" in which we all interact daily, we are seeing more and more that you don't have to use a service in any way in order to be affected by the decisions that services make about its own users' privacy. All entitlements aside, it is becoming increasingly difficult to maintain control over your own privacy when the details of your life are extracted not as a result of your own deliberate decisions but by the decisions of others.
Opinions about whether Wil Wheaton is a self entitled geek aside, I hope we can all agree that that is a point worthy of consideration.