Photos Inc. has been a serious business, and generally extremely valuable for a century. There's a reason every smart phone has a camera built into it, and in the near future 2/3 of all humanity will own a digital camera.
Facebook generated $12.4 billion in sales and $3 billion in profit last year. Facebook regards photos as a linchpin to their success. Why? Because photos (sharing, saving, viewing) are one of the most important social activities people do.
The value of photos has remained true through countless technology shifts, and will remain true for the next century, because it's based on a simple principle: people want to save visual memories, and share them with others.
It's not the interest in Instagram that's wrong, it's your incorrect appraisal of what other people value.