I'm going to clarify what I mean about "instrumentalism" and "empiricism". I don't know if we actually disagree or there's a misunderstanding.
FI has somewhat of a mixed view here (reason and observation are both great), and objects to an extreme focus on one or the other. CR and Objectivism both say you don't have to, and should not, choose between reason and observation. We object to the strong "rationalists" who want to sit in an armchair and reason out what reality is like without doing any science, and we object to the strong "empiricists" who want to look at reality and do science without thinking.
Instrumentalism means that theories are only or primarily instruments for prediction, with little or no explanation or philosophical thought. Our view is that observation and prediction are great and valuable, but aren't alone in being so great and valuable. Some important ideas – such as the theory of epistemology itself – are primarily non-empirical.
There's a way some people try to make philosophy empirical. It's: try different approaches and see what the results are (and try to predict the results of acting according to different philosophies of science). But how do you judge the results? What's a good result? More accurate scientific predictions, you say. But which ones? How do you decide which predictions to value more than others? Or do you say every prediction is equal and go for sheer quantity? If quantity, why, and how do you address that with only empiricism and no philosophical arguments? And you want more accurate predictions according to which measures? (E.g. do you value lower error size variance or lower error size mean, or one of the infinitely many possible metrics that counts both of them in some way?)
How do you know which observations to make, and which portion of the available facts to record about what you observe? How do you interpret those observations? Is the full answer just to predict which way of making observations will lead to the most correct predictions later on? But how do you predict that? How do you know which data will turn out useful to science? My answer is you need explanations of things like which problems science is currently working on, and why, and the nature of those problems – these things help guide you in deciding what observations are relevant.
Here are terminology quotes from BoI:
Instrumentalism The misconception that science cannot describe reality, only predict outcomes of observations.
Note the "cannot" and "only".
Empiricism The misconception that we ‘derive’ all our knowledge from sensory experience.
Note the "all" and the "derive". "Derive" refers to something like: take a set of observation data (and some models and formulas with no explanations, philosophy or conceptual thinking) and somehow derive all human knowledge, of all types (even poetry), from that. But all you can get that way are correlations and pattern-matching (to get causality instead of correlation you have to come up with explanations about causes and use types of criticism other than "that contradicts the data"). And there are infinitely many patterns fitting any data set, of which infinitely many both will and won't hold in the finite future, so how do you choose if not with philosophy? By assuming whichever patterns are computable by the shortest computer programs are the correct ones? If you do that, you're going to be unnecessarily wrong in many cases (because that way of prediction is often wrong, not just in cases where we had no clue, but also in cases when explanatory philosophical thinking could have done better). And anyway how do you use empiricism to decide to favor shorter computer programs? That's a philosophy claim, open to critical philosophy debate (rather than just being settled by science), of exactly the kind empiricism was claiming to do without.
Finally I'll comment on Yudkowsky on the virtue of empiricism:
The sixth virtue is empiricism. The roots of knowledge are in observation and its fruit is prediction.
I disagree about "roots" because, as Popper explained, theories are prior to observations. You need a concept of what you're looking for, by what methods, before you can fruitfully observe. Observation has to be selective (like it or not, there's too much data to record literally all of it) and goal-directed (instead of observing randomly). So goals and ideas about observation method precede observation as "roots" of knowledge.
Note: this sense of preceding does not grant debating priority. Observations may contradict preceding ideas and cause the preceding ideas to be rejected.
And note: observations aren't infallible either: observations can be questioned and criticized because, although reality itself never lies, our ideas that precede and govern observation (like about correct observational methods) can be mistaken.
Do not ask which beliefs to profess, but which experiences to anticipate.
Not all beliefs are about experience. E.g. if you could fully predict all the results of your actions, there would still be an unanswered moral question about which results you should prefer or value, which are morally better.
Always know which difference of experience you argue about.
I'd agree with often but not always. Which experience is the debate about instrumentalism and empiricism about?
See also my additional comments to Gyrodiot about this.