Still having the same problem. Solving it is easy though, following this thread on SO : http://stackoverflow.com/questions/8971261/php-5-4-call-time-pass-by-reference-easy-fix-available
1°) You open instagram.php in the plugin’s folder.
2°) You’re looking for the declaration of the method getFeedByUserId and getFeedByTag
3°) You change $nextMaxId = 0 with &$nextMaxId = 0
4°) Then, you look over instagram.php and widget.php and every time you see &$nextMaxId you change it for $nextMaxId (removing the ampersand)
5°) Activate the plugin
But it would be easier if the plugin was PHP5.4-ready