Scenario the first.
So FB dropped a cool billion on a photo-sharing social network and app with a sizeable, vehemently dedicated and pretty damn vocal userbase. Now they want to make money out of it. Fine.
"So guys, Instagram monetization. Hit me." "Um." "Um." "Ads?" "Perfect!"
I (and I'm sure a large majority of Instagram users) am pretty much instantly put off by ads. Especially in-app or in-feed apps. Any ad space sold on my screen is pretty much money wasted.
Scenario the second.
There have to be other ways to make money from Instagram that make one iota of sense given the community and demographic. Premium filters maybe? I'm just sayin'.