I actually agree with the "hanging is bad" point. In fact, there is a jira on this, which - per your tone you might find surprising - I am actually working on right now:
For whatever reason, I do not have access to that JIRA [perhaps you could give me permission considering I am a Red Hat Employee].
I am glad to hear that is a JIRA; and I did not know it was a JIRA considering I have opened two Service Requests and argued the points with you both throughout the morning without acknowledgement of the issue.
My belief is that it is not bad for the service to FAIL with an Exception. I do believe that it should not hang, however, thus the jira item above.
I do think failing is an issue in the sense that even if the remote service comes back online, this one never will.