Hi there, @benjamin_shiple ...
I tested this out in my own sandbox course. I am also getting a gray box after using embed code from an image uploaded to Instagram. I went a step further and compared the embed code I pasted in to a Canvas page with the same page after I had saved the page and then went back to edit the page. The code was significantly less than what I originally pasted in...which tells me the editor was probably stripping out some of the code that it doesn't allow in Canvas pages.

The code on the left was the code I got from Instagram. I pasted that into a Canvas page, and then I saved the page to see what it looks like (result: gray box). Then, I went back to edit the page and check out the HTML. The code on the right is what I saw.
I think it would be cool if Instagram/Facebook created a LTI integration. It would, hopefully, resolve the issue you and I are seeing here.
Hope this helps, Benjamin.
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