Here’s another angle on a set of already very good answers: the most obvious value of Facebook as a service to users is for one-to-many communications of “present tense” thoughts and activity. Photos are already a huge part of that experience, as I believe that Facebook is the single largest photo sharing service on the web.
The collection of all of those “present tense” things + the passage of time means that Facebook also is a massive repository of “past tense” things. This reality is reflected in the recent Facebook Timeline redesign/launch.
Facebook is to the 21st Century what Kodak was to the 20th Century. They catalog what you thought, who you were with, and – most pertinently to this question – what you saw. They’re in the business of capturing and sharing memories.
The value that Instagram provides to users is that it makes memories more interesting. That’s a pretty solid alignment with what Facebook is all about these days.
when I post images from my cellphone it’s emailed (to a distribution list that includes the Twitpic & Facebook posting addresses) and its not trivial.
This answer reminded me that if you make something even a little easier, there may be surprising suppressed demand for the facility.
I actually post pictures in preference to status updates, for me, they are easier. Going by the number of other spontaneous “Kodak moments” I see (very few), that’s not the case for many.
The “Insta” in Instagram.