Problem with them was the massive about of money they were burning on servers and being sued by RIAA (Music companies) and MPAA (Film companies) among others. They needed a big infusion of capital.
Instagram on the other hand could have remained independent and succeeded.
I don't think YouTube would have been one of the biggest companies if it remained independent.
The problem is that YouTube is still not profitable, and also without a support from a big company like Google they would be sued into oblivion by MPAA and RIAA.
Instagram on the other hand could have remained independent and succeeded.