Maybe it wasn't important at the time. Instagram only became wildly popular after they introduced stories, which they didn't have at the time, did they?
I think OP's larger point stands -- it might've played our differently had Twitter acquired instagram. Maybe they would've done what they did with Vine.
https://www.yahoo.com/news/instagram-hits-300-million-users-...
Stories is what they introduced to kill Snapchat's growth.