It's not just Apple's bandwidth; it's users' iCloud storage, which costs users money.

The user can always choose not to sync Instapaper if he feels its costing him storage (though in reality, I have to wonder how much storage simple articles with occasional images could really take).

I think that has to be the best solution. It's far better to just have everything sync to iCloud and let the user choose to disable it rather than having Instapaper's primary core functionality - being able to read articles offline - not work properly.

Also don't forget that many people in world still (for whatever reason) don't have unlimited data plans. So if everything that get's downloaded also gets uploaded back to iCloud, then you've effectively halved their bandwidth quota.

I think iCloud syncing only happens over wifi.