Generally whenever Apple, Google or Facebook buy another company that runs a particular service, they run it for a year or so and then either integrate aspects of it into their service or not… and then shut it down.
You never know Facebook may continue to run Instagram as a separate service, however I think after a year it will probably cease to exist…
Google took Jaiku and Picnik, two excellent services, deprecated their functionality and integrated aspects into Google+ (probably Buzz and Wave too) however both services are now shut down.
Apple took Siri and integrated it into iOS and made it 4S only whereas before it worked with the 4 and 3GS.
Facebook bought Gowalla and integrated it into Facebook and then shut down the service.
I would be very surprised to see Instagram operating as it currently does after a year, if at all.
I do like Instagram, and I see it much more of a social app than a photographic app, there are many apps out there that do a significantly better job at image editing. However they lack the social aspect that you find in Instagram.
Ah well, one shouldn’t really think that things like this don’t happen and it does more often than I like, but that’s life I think.