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with the stock price through the roof other funds (and retail investors) see it as a good opportunity to short.

Instagram was not the "main game in town" when Facebook acquired them. It was one of many photo sharing/editing apps and had far less market penetration than it does today. Why should Facebook be punished for acquiring a promising app and turning it into what it is today by integrating it into its ecosystem?

Hindsight is 20/20 but at the time of acquisition it was far from a sure thing and it's safe to say that without Facebook resources Instagram would not be what it is today.

Couldn't agree more. You're asking 330 million Americans to give up some of their freedoms without any real plan or timeline; of course there is going to opposition.