To prevent sharing out except to Facebook, Instagram would have to disable its API and stop saving photos to Camera Roll. I don't expect either of those to happen.

Even if the deal might fall through, I could easily imagine Mike taking a day or two to celebrate instead of jumping back in and answering questions, particularly on the instagram-api list, since nurturing a slowly-growing ecosystem is not Instagram's best path to a successful exit. Logically, I think he did it because he's a nice guy.