Instagram was and still is in a highly competitive market. Previously it was Snapchat at the time and now it's Tiktok. Not to mention YouTube shorts, Reddit, Twitter, and every other service focused on video and pictures.
I don't think any social media consumer is lacking choice.
Regardless of how much “choice” there is in a market, FB made an anti-competitive play. Now we all have n-1 choices.
The question of whether society should allow companies to perform anti-competitive actions should not be “will we be left with enough choices?”, but should be “is this an anti-competitive action?”
A true accounting of board level corporate motivations is not available. The standard line is typically something like “we are acquiring our smaller rival to more effectively compete with our larger rival”. I.e “we are acquiring a small desktop publishing start up to compete with the largest cloud computing provider”. Or in this case: “we are acquiring a small photo sharing company to compete against Google/Youtube”.
