"Think of the kittens, think of the breakfast plates, think of the converse shoes. Free the photos."

Best quote ever and pretty much encompasses everything about Instagram in one sentence. I don't see what the big deal is, Instagram issued a clarification statement about the TOS changes. And in all honesty it's not like the photo quality of an iPhone image is that great, especially not for advertisement purposes let alone the subject quality of the images themselves.

As an aside: you can't argue Flickr's $25 per year pro account is extremely good value for money. Especially if you're uploading a lot of photos. I've seen photo shoots that resulted in thousands of images before from just the one shoot. Instagram isn't a site for pro photographers, it's more teenagers at parties and hipster eateries.