Unfortunately this is a limitation of working with an API to get images (like our plugin does from the Instagram API). We are limited to requesting images in only 3 sizes, the smallest of which is the "thumbnail" 150px by 150px size. The others are "normal" 320px by 320px and "full" 640px by 640px. So if your posts are between two of these sizes, they will not be very optimally sized.
There are a lot of "unofficial" image sizes that are available. These are currently in use in the "Pro" version. It will not be released to the "free" version right away due to support concerns if Instagram decides to discontinue the unofficial sizes. This may change in the future.
The actual loading of the feed does not affect the initial page load. The plugin loads the feed after the rest of the page has loaded. This is generally considered a better user experience but we have had a few users asking about an alterative due to the same issue you mentioned with the google page speed tool only considering the overall page load.
Hopefully this explanation helps you understand!