I think it's more appropriate to think of Instagram as similar to Twitter rather than MySpace. And once you do, the analogy breaks down.<p>Path is great for super personal stuff, and the 50 user limit is good for that. Instagram is more like Twitter, where you can take <i>interesting</i> photos and anybody can follow you.
All the Social networking sites eventually start being used as marketing platform by the people. Take facebook for example; things are no more constrained to being social there, people find gratification when more and more people are friends with them and interact with them. I know a lot of people who have more than 3000 friends on their FB profile. Now, is there anyway to actually be friends with 3000+ people in reality. IMHO no. People do this either to promote their blog or product. FB pages might be an argument for this, but that does not stop marketeers from being friends with Random people.<p>As far as privacy goes, I ll just repeat the cliche = "don't share something in public which might hurt you later"
Given how much baggage the words "closed" and "open" have in software development, I'm not sure it's wise to use them as this article does - as stand ins for "public" and "private".