It can be done. I think I've seen a script around somewhere that does it, but it's fairly easy to do manually through the track view. I just did it this week with a bunch of car meshes that I needed to be instances that had been put in as copies) :
select your object you want propogated as an instance
in Track View copy its object track,
select all the object's object tracks that you want to change to become this instance,
paste (as instance) !
Use the 'filtering by name' feature in trackview to make this easier
coupled with show only selected objects
ie i type in obj and it just lists all the object tracks
(copied from a post over on scriptspot)
link to script page (and above post):
http://www.scriptspot.com/3ds-max/instance-replaceSJ