I agree with you, fines will happen in extreme cases, based in my experience with similar laws.

Currently GDPR is news and there's a lot of hype around it and Instapaper is getting some attention because they failed to prepare AND, by the looks of it, decided to implement some unnecessary measures.

I'm sorry to say that this looks like a PR stunt. Are they going to block EU users for months? I think any legal action against them was very unlikely, they could have solved the situation quietly.