I think the reason is that people saw the torrent of media attention that Instagram got. Every CEO is thinking now "If I can only get the number 1 billion somehow in a press release I will be on every newspaper and blog in the country." Quite predictably, Instagram got people greedy and spurned them to action.
If you go to a good securities lawyer and say "We need to get a round closed at one billion dollar valuation, but the investors need it to be effectively at a lower valuation because for them 1 billion is just ridiculous" the lawyer will figure out a way to do it. There are all kinds of tools that you can use to ensure that the investors still make money for exits under 1 billion even if the valuation is technically 1 billion.
If you go to a good securities lawyer and say "We need to get a round closed at one billion dollar valuation, but the investors need it to be effectively at a lower valuation because for them 1 billion is just ridiculous" the lawyer will figure out a way to do it. There are all kinds of tools that you can use to ensure that the investors still make money for exits under 1 billion even if the valuation is technically 1 billion.
So this is all just headline grabbing.