The real issue to me is their apparent zero tolerance policy. Unless I'm misreading something, if there are two incidents where your site is used for phishing, you will lose your Rackspace account. I understand that Rackspace doesn't want to go chasing these things left and right, but it seems that's a little extreme, especially when they're supposed to be infrastructure providers, and should recognize that their clients have clients, and their clients shouldn't be held entirely responsible for the actions of their clients' clients.