Running Appium on real devices with ios 8 or 8.1 you need to enable a new Setting.
Under the Settings app, there will be a "Developer" item, choose it and enable the "UI Automation" toggle.
I honestly looked for the setting a dozen times and it wasn't there on my iPhone 5s. It appeared on my iPhone 6 as soon as I plugged it in to USB.
Not sure how to get it to appear when you don't see it, but try rebooting everything obviously. Maybe try running XCode Instruments manually?
If you don't enable this, instruments crashes as soon as it starts. If you try running an Automation script from XCode, it just fails with "An error occurred while trying to run the script". You might see "WebKit Threading Violation" in your log, but ignore it, the real smoking gun is: "UIAScriptAgentSignaledException"