Their response to the concerns can be found on on the official Instagram blog, confirming that users still own their photos, that private photos will remain private, and that they aren’t intending to sell anyone’s personal photos:
…Our intention in updating the terms was to communicate that we’d like to experiment with innovative advertising that feels appropriate on Instagram. Instead it was interpreted by many that we were going to sell your photos to others without any compensation. This is not true and it is our mistake that this language is confusing. To be clear: it is not our intention to sell your photos. We are working on updated language in the terms to make sure this is clear.
[…] Instagram users own their content and Instagram does not claim any ownership rights over your photos. Nothing about this has changed. We respect that there are creative artists and hobbyists alike that pour their heart into creating beautiful photos, and we respect that your photos are your photos. Period.
[…] Nothing has changed about the control you have over who can see your photos. If you set your photos to private, Instagram only shares your photos with the people you’ve approved to follow you. We hope that this simple control makes it easy for everyone to decide what level of privacy makes sense.