(Preface, I work in digital marketing so this may get a bit ranty- my apologies.)
Follow/Unfollow methods for growing an Instagram account are two sided, in my opinion. While they definitely work and I wouldn't say it's a black hat method, I would definitely say it's gray. To me, it comes down to the value you can get out of an Instagram account and As you said, it's extremely difficult to get any traffic out of Instagram.
Unless you're running paid ads that allow links, it's a a branding tool. Your time is much better spent growing a Twitter account if traffic is ultimately what you're after. If you're looking to make money off your IG account and you do have a huge following, traffic probably isn't your concern. Companies love to have large accounts feature their product or destination for a fee, like a billboard. To them, it makes sense because it's just another channel where they can shove their brand in front of their consumers while they are also spending their digital dollars in countless other places. So for the vast majority, I just don't think Instagram matters all that much as a solo product.
But this isn't all that much unlike Facebook. Your content is going to go no where if you post organically. Sure, your post will get a small amount of exposure, but think about the amount of content you're organic content is competing with on the average FB feed? Facebook is pay to play and if you're not paying, you're the product. This still doesn't stop so many people from going after growing their FB followers.
So with that, I absolutely agree it sucks to see your Instagram followers fluctuate so much without a whole lot to do about it. I want a large number next to my "Followers" as much as the next person. Does it really matter? Probably not. There are always going to be people attempting to game a system, but for me, the value from Instagram is beyond the marketing potential and that's why I'll still use it- even if rando bots follow and unfollow me.