There are a few apps that you can use that call themselves photo editing application and all they do is to let you apply weird filters to photos. Instagram would be more filters and sharing the weird photos. I like ArtStudio for editing a photo because I can use layers to be able to do non destructive editing.
It doesn’t matter anymore if you have an iPad 1 with no cameras or the iPad 3 with crappy cameras the ability to edit photos well is important because we have the Photo Stream element of iCloud to give us photos to edit. better to do that on the iPad with the bigger screen than on the small screen of the iPhone.