> If delays aren't costly, sure, any algorithm is fine.

Not true, delays aren't the only costs. Compute, network, and developer time digging through logs all cost money, and hammering a service fruitlessly when it is down adds to all of those.

(It also doesn't help that “system is overloaded” may sometimes be communicated clearly, but also in many systems can manifest in... just about any other kind of error, too.)