Without passing judgment, this is the reality of Facebook.
Even without all the similar changes that FB has made in the recent past, this episode should serve to inform all FB/Instagram users of their mindset and company practice.
This is the way they think about data that their users upload, be it a photo or a status update or a 'like' - it is information that they want to make money out of. That's not inherently a bad thing and by no means unique to Facebook but if you don't like that then it really is time to start thinking about moving away from that ecosystem.
Still, my own personal opinion is that they were testing the waters. All such policies, be they privacy, usage or even laws, tend to be worded in such a way as to provide a large scope for the company (or government if it is a law) to do a great many things that might not be within the 'spirit' of it.
On the surface of it, the post by Systrom is straight-forward and takes responsibility for the confusion, rather than simply saying it was the users who were confused as is the usual response. This, again on the surface, is commendable.
If the language of the policies really does not mean what they wanted it to mean then that is not a good look for a company handling the data and private information of millions of people.
With such legal resources at their disposal, however, it is vanishingly unlikely that the language used says anything other than exactly what they wanted it to say. From that, Systrom's claim - that the original policies were a mistake and didn't accurately reflect their goals - must be seen as a lie.
This does rest on an assumption but I think it's a fairly likely one - that Intagram, through Facebook, has access to enough legal resources that any confusing of misleading wording would have been identified and discussed. In other words, Insatagram had full chance to correct the wording well before the policies were made available. They did not do so.