640px is the exact width of the iPhone 5's screen.

While you may want larger images, the fact is that Instagram has a large number of users in foreign markets and they're trying to expand their presence there. Increased resolution means larger resource requirements, and ultimately, a slower/reduced experience for the users they're trying to reach.

To be honest, a community like 500px might be more along the lines of what you're looking for.

Yes, it's quite frustrating for people (like me) building print products on top of the API.

We can get decent prints up to about 8x8" but that's about it.