If you think Instagram is just a collection of photo filters, you're missing the big picture. Maybe photo sharing won't lead directly to world peace, but helping people to see the world through the eyes of others looks like a step in the right direction to me. And they grew to over 200 million users in less than four years.
The whole talk was "building the impossible", and I think that's what Silicon Valley used to be about -- about going from 0 to 1 (in Peter Thiel's term) and letting the world go from 1 to n. That's impossible and that's what the valley did for decades.
But now the measurement is, "How many users to do you have today?" It's superficial and meaningless. Instagram is a great success for its investors (and I have nothing against that) but it won't be around in ten years, and more importantly, nothing it brought forth will be around either. Instead of 0 to 1, it's more like 1000 to 1001.
I have no problem with people making money, but you make what you measure, you make what you fund. And we're getting what we make: Flappy Birds and fucking Instagram.