DDOS attacks are a fact of life, nice to know that Rails Machine will throw you under the bus when one happens. Doesn't seem to fit their homepage description: "You write Rails apps. We deploy, manage, support, monitor, and scale them. Done."
So if someone throws multiple tens of gigabits at your customer, and your upstream threatens to turn off your entire hosting company, you would respond "no way, we're going the extra mile for our customer"? Rails Machine was, in all likelihood, compelled to act to either (a) preserve its relationship with is upstream or (b) preserve its relationship with its other paying customers that do not attract DoS attacks. You…
I've seen these attacks mitigated single-handedly by an experienced fellow with no access to fancy equipment. I believe it went something like this, change the DNS to point at some EC2 instances to do front-end load balancing with some scripts that detect and drop connections from attacking IP addresses and do severe rate limiting. You can proxy legitimate requests back to the original servers.
Granted, not everyone knows how to do that in a pinch, but it shouldn't be a big deal for a hosting company. You only have to figure out how to do it once and when you detect a DDoS attack, flip the switch for that customer.