It used to be that being a part of an elite group had a barrier to entry. You earned it up front then gained entry. Now the elite group has no barrier to entry, and the payment is essentially what you do within the group. The group itself has to be known though to be an elite – to be desirable to belong to, so usability is key – the more people use it, the more people want to use it, simply because the content is generated by the group.
However adding too many feature introduces new barriers, in terms of usability, and more importantly in terms of the new language of the group – instagrams language – square photos, and photofilters, with like+comment+follow functions is something familiar and easy to pick up (hey, friends are familiar and social networks can now just bootstrap from one another). If more features were added, this would stratify the users into subgroups, which is not really desirable when trying to build (and sell) a unified community. Keeping it simple allows a faster community build, a more cohesive community – something that more features cannot help. It becomes very important then that the selected features work amazingly well!