But the reselling of photos as described here is not particular to Instagram. It involves an artist who reappropriates them for artistic purposes (similar to parody)...he could've done this with any photo or off of any service...so this concept isn't even particular to the Internet and the digital age.
However, such examples as the OP are always good for discussion about "what is art?"...it's not so much the actual work (measured in sweat and hours) put into it, but the skill in repurposing it, and in the reputation of the artist...you have to build up quite the career of actually interesting work before you can get to the point where a rich tycoon will pay you $250K to splatter mud patterns on one of his walls. It'd be interesting to see a lawsuit come out of this...I'm guessing the artist could make a good case that the original photographers would never be able to raise $90K for their images...people only pay for it because it is work that he noticed/curated/altered.
[1] http://blog.instagram.com/post/38252135408/thank-you-and-wer...