Hey – Brian from Instapaper here. I've been at Instapaper since the betaworks acquisition in 2013, so I have a lot of context here.
We've made tons of progress since I joined, redesigning the apps, websites, launching highlights, rebooting our business model, text-to-speech, speed reading, re-writing our parser, re-building our full-text search engine. The list goes on.
We currently don't have an image proxy for Instapaper, so yes when you visit the site we load the original images. We have discussed adding an image proxy but felt it would be a lot of overhead in server costs and maintenance for minimal value.
Additionally, I'm not sure it's fair to represent that fetching images from the original sources that a user saved is tantamount to sharing data with third parties, which has a different set of implications.