Didn't they just buy it though? Then they proceeded to fuck it up just like they did to Facebook.

Depends on your interpretation. Maybe? I think there's a fair case that Instagram wouldn't be what it is today if it wasn't bought by Facebook.

You could also level a similar question at Google about YouTube. I believe YouTube is one of Google's great successes (bias: I work at Google), and that it wouldn't have become what it is now outside of Google, but I think it would be hypocritical of me to not accept the same about Instagram.