I am positive there are bare-metal, no shared tenancy, customers of MS already. Unclear if they are down too. While yes, these companies are massive, not being allowed to share infrastructure defeats the entire revenue-purpose of offering a cloud. The hardware in these servers is unbelievably expensive. You'd go back to everyone having an IT department and a few racks of servers for hardware configurations that meet their specific needs (which I'm totally okay with, and even rooting for!)

I'm an outsider who used to work at a different cloud provider, so take this with a grain of salt, but this doesn't smell like a limits and provisioning problem, per se. It's not necessarily like they just had 1 too many emails tip the scales for the entire world. Until today stuff was running okay. This was a monitoring and fail-over problem, at a comically tragic scale - a cascade failure. Architecturally they obviously did not design for a world where they could damage control failure at this scale. Failure should be expected and designed for at literally every layer. They cheaped-out on careful design in order to play catch-up building a public cloud offering and here we are.