Your comment made me realize that they did not even try. If they're afraid of not being able to anticipate the cost, they could do it using subscription type in-app, like "a year without any ad" and only offer it to a limited number of random people at first.

But they didn't even try. Which is astounding when you think about the general hate for ads.

That's the feeling I'm getting as a result of this. I think it's great that Instagram took a long time before they launched this, and I'm not sure what tools people have in order to report, block and hide ads, but it's clear from this experience it's something the community wants.