Seems like it is up a bit tho. The store doesn't work for me but a game I was downloading before the outage is actually still downloading. Same with Xbox for me as of last night. Live is working but I couldn't get on the store.
Is it unacceptable? I dunno. Paying for a service I cannot use is always annoying. But it's not like I'm ever compensated by my cable company when my internet goes out for 2-3 days.