yes. Instagram is just the start. For an app that was trying to streamline photosharing they require(d) a lot of steps.
Compare it to something like Checkie: http://itunes.apple.com/gb/app/checkie/id382356167?mt=8
which radically streamlines the process of using +foursquare
Instagram uses the web for:
- account recovery and password recovery
- social distribution. Every Instagram photo has a URL so that you can share it on the social web.