The problem here is Rackspace as a infrastructure provider judging on behalf of service provider. They give no explanation of the complaint details or why it is justified.

Many comments here take the phishing as "a fact", their terms might grant them the power to shut any server down but this is a threat I think every startup should learn if they use Rackspace Cloud or consider to. And we learnt that.

24 hrs is not just for respond to remove the content, it is also for the server providers to verify the complaint and react responsibly.

Agree. This wasn't a simple DMCA issue-- phishing is an active, criminal activity. Even one hour notice is generous.

Taking the contents of the article on faith, I think the point was that their customers were abusing the startup's service for phishing.

This would be analogous to, for example, AWS taking reddit offline because a user posted a phising link.

Nearly every web business which lets people put information on the web that others can see will face abuse issues at some point or the other - and cutting off a business and its legitimate customers because of one client misusing the service does not inspire confidence.