Also, while I completely understand Instapaper's unwillingness to pursue this through the courts, that is the way our legal system is structured. If you believe you have been harmed in some way by a government action, the courts are the avenue through which you must obtain recourse.
(Not a lawyer, so if I'm wrong about any of the above please correct me.)
Again, though, the question isn't whether they had the right to seize the servers they had warrants for - they did, and you won't get that questioned by any court - but whether they did so properly, and it's not unheard of for a law enforcement agency to get slapped for overstepping their bounds. It's not Common, but it's not unheard of, and it's not a 4th amendment issue either.
"Oh, phew, carry on."
You're kidding me, right?
After all, I do have the right to drive cars, including cars which I don't own.
How is this at all analogous to a warranted search? The FBI had permission to take something - so did they perform due diligence to make sure they took the correct something? That is the question.
So let's say I gave you permission to drive my car. It's green. You hop in a green car near my house, find the keys in the ignition and leave for four hours of errands. (Typically, I'd give you my key and you'd select a car that the key fits, but not today.) My neighbor reports his green car stolen and the police intercept you on your way back into the neighborhood. Did you perform "proper diligence" in selecting the correct car to take?
I have no idea how this situation would play out, but I suspect your own intent (to drive MY green car) plays into the considerations of the prosecuting attorney.