>My understanding is that legal documents are written precisely to be as hard to misinterpret as possible.
In this case, the issue is that legal documents are written to be as cover-your-ass as possible. Instagram needs a license for your content to show it on their site. Then a lawyer says "what if Facebook sells Instagram to someone else?". So they add a bit that makes it a transferable license. That was easy! But then someone who is not trying to cover Instagram's ass reads it and says "that means they can sell the rights to my photo." And that's true. It wasn't the intent of the lawyers but the lawyers really had no intent regarding protecting the user's rights. They're just watching out for Instagram.
It is the responsibility of someone in the company (not necessarily a lawyer) to think about how those legalistic terms would look before they were unleashed on the public. The company is now big enough to know better. The changes to the TOS that are promised in the blog post should have been made up front, not in response to a PR disaster.
In this case, the issue is that legal documents are written to be as cover-your-ass as possible. Instagram needs a license for your content to show it on their site. Then a lawyer says "what if Facebook sells Instagram to someone else?". So they add a bit that makes it a transferable license. That was easy! But then someone who is not trying to cover Instagram's ass reads it and says "that means they can sell the rights to my photo." And that's true. It wasn't the intent of the lawyers but the lawyers really had no intent regarding protecting the user's rights. They're just watching out for Instagram.