The user does explicitly either take the photo inside the Instagram app or select it. Note that the final button that published the photo to the user’s stream is labeled Done, not Upload. They don’t just arbitrarily upload photos from the camera roll or from the camera before the user has tapped the camera shutter button.
EDIT: And as others have pointed out, photos are only uploaded after the user has selected a filter and tapped the green check mark, not as soon as they are taken.
I think it's assumed that you are going to post any photos you take when you use Instagram - as the app doesn't actually save photos to your phone unless you post it (or if the upload fails).
I would understand the concern if it acted like a camera app - ie, you take a photo, it's saved to your phone's photostream, and afterwards you can choose to hit upload, but since you can't use it in that way (it's either post it or the photo is gone) I don't really see a problem.
The user does explicitly either take the photo inside the Instagram app or select it. Note that the final button that published the photo to the user’s stream is labeled Done, not Upload. They don’t just arbitrarily upload photos from the camera roll or from the camera before the user has tapped the camera shutter button.
EDIT: And as others have pointed out, photos are only uploaded after the user has selected a filter and tapped the green check mark, not as soon as they are taken.
On the Android version it says Upload instead of Done. I can't tell what point it starts uploading but it seems to appear pretty quick on my page.
I think it's assumed that you are going to post any photos you take when you use Instagram - as the app doesn't actually save photos to your phone unless you post it (or if the upload fails).
I would understand the concern if it acted like a camera app - ie, you take a photo, it's saved to your phone's photostream, and afterwards you can choose to hit upload, but since you can't use it in that way (it's either post it or the photo is gone) I don't really see a problem.
I just had a skim through and I can't see anything under T&S nor in the Privacy Policy.