We have a differing opinions on what outage means then. Catching the error and showing it to the user is obviously the right thing to do, but not what I'd call an outage.
I can't say I've ever met a developer who thinks that a 100% error rate to valid requests isn't an outage. Not sure why you have such a strong view of your semantics.
Sure it is, if it affects all users at once, and makes your system unusable. If I dial a phone number and get a busy signal, that's an "error" of sorts. If every Verizon user gets that busy tone on every call, that's an outage.