Flickr and Google (among others) don't claim the kind of license that Instagram demands in the new ToS. So this is only a big deal in that there are some alternatives that don't suck and are really easy to switch to.
If they want to put content users in touch with content providers, they can do what Flickr did: make a way for them to do so. There are a ton of ways to monetize that, too, without dialing it up all the way to "we own your content". I bet most users would love a request system that lets businesses use their photos free of charge with attribution if they click "yes".
What? Instagram's current TOS includes the following:
"By displaying or publishing ("posting") any Content on or through the Instagram Services, you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, worldwide, limited license to use, modify, delete from, add to, publicly perform, publicly display, reproduce and translate such Content, including without limitation distributing part or all of the Site in any media formats through any media channels, except Content not shared publicly ("private") will not be distributed outside the Instagram Services."
So the "new" ToS is not as far from the old one as you would think.
If they want to put content users in touch with content providers, they can do what Flickr did: make a way for them to do so. There are a ton of ways to monetize that, too, without dialing it up all the way to "we own your content". I bet most users would love a request system that lets businesses use their photos free of charge with attribution if they click "yes".