It's pretty bad - worst thing is that apparently it has affected TFS online as that uses Azure at its backend. Fortunately for us, we're still in the 'R&D' process to TFS online and we're not yet live with anything that's critical, but that would have been bad if we were fully live and unable to do checkins or builds. I think someone at Microsoft is going to be in trouble for something so critical and stupidly missed...
Wasn't it Microsoft who quite a number years ago let one of their big domain names expire? If I remember it correctly I think it was hotmail.com or something. In the end a customer/developer re-registered it and pointed the DNS entries to the Microsoft server so it could be brought back up as it happened in the middle of the night and he couldn't get in touch with anyone at Microsoft. Might not have all those details right, but I seem to remember reading about it at the time.
Edit - yup, seems my memory is correct about this: