In my mind, a "degradation" would be if some fraction of requests were randomly failing, but they would be likely to eventually succeed if retried. Or if the service itself was essentially accessible, but some non-essential functionality was not working correctly.
On the other hand, if for a significant number of users the site was completely unusable for some period of time, then I think it's fair to use the word "outage". (Even if it's not a complete outage affecting all users.)
I don't know whether other people would interpret these terms the same way I do, nor do I think there's enough information in this blog post to determine for sure which label is more accurate for this particular incident. So personally, I'm not going to be too picky about the wording.
> Because "A substantial majority of API requests during these windows failed. " implying that there was not a complete outage.
The fact that you needed to qualify “outage” with “complete” clearly means the word on its own is not incorrect for cases where a system was “only” mostly unavailable rather than completely so.
> I don't understand why people demand the usage of incorrect language.
I don't understand why people demand the usage of incorrect language.