NO NO NO
That option should never be selected. It’s only good purpose is for converted Quark files.
Just select the text frame, right click and choose text frame options and then enable ignore text wrap.
but I also need a 10px margin/offset around the picture so the story text doesn't smoosh into the edges of the picture.
It sounds like you do want a text wrap right?
So before you generate the caption, use Caption Setup to set the caption offset and group the caption with the image. Here I have a .125" offset (the distance from the image frame to the top of the caption), a paragraph style for the caption, and grouped:
Then I generate the caption and set the desired text wrap to the image/caption group:
While what you say is true if you're just starting a new project I was trying to give a fast and easy way to take care of his issue. For some reason I assumed the OP had already created several text frames and wouldn't want to go back and select them all to change the setting to ignore text wrap.
Thanks everyone, this gives me lots of insight. I will go back and play with the settings you suggested.