Your quotes from the privacy policy do not describe “targeted advertising”. Indeed, the section you quoted from has this preamble:
> We use non-identifying and aggregate information to better design Instapaper, to suggest popular content to users, and to share with advertisers and publishers.
and this afterwards:
> When information is used in this or a similar manner, we do not disclose anything that could be used to identify the individuals on whom the information is based.
I suppose using aggregate data in that manner could technically be described as “monetiz[ing] using user data”, but it’s not the type of activity most people are worried about (nor, incidentally, something that would implicate the GDPR).
As for the ToS license grant, it’s presumably the type of cover-your-ass wording lawyers always put into those agreements. I’m not a fan of the practice myself, but it’s not really evidence that Instapaper does, or intends to, use user data after deletion. Also, it might be intended to address backups, though I’m just speculating.
> We use non-identifying and aggregate information to better design Instapaper, to suggest popular content to users, and to share with advertisers and publishers.
and this afterwards:
> When information is used in this or a similar manner, we do not disclose anything that could be used to identify the individuals on whom the information is based.
I suppose using aggregate data in that manner could technically be described as “monetiz[ing] using user data”, but it’s not the type of activity most people are worried about (nor, incidentally, something that would implicate the GDPR).
As for the ToS license grant, it’s presumably the type of cover-your-ass wording lawyers always put into those agreements. I’m not a fan of the practice myself, but it’s not really evidence that Instapaper does, or intends to, use user data after deletion. Also, it might be intended to address backups, though I’m just speculating.