Many AWS customers have bad retry policies that will overload other systems as part of their retries. DynamoDB being down will cause them to overload IAM.
>We recommend customers continue to retry any failed requests.
There's no such thing as infinite scalability. Even the most elastic services are not infinitely elastic. When resources are short, you either have to rely on your customers to retry nicely, or you have to shed load during overload scenarios to protect goodput (which will deny service to some). For a high demand service, overload is most likely during the first few hours after recovery.
See e.g., https://d1.awsstatic.com/builderslibrary/pdfs/Resilience-les...
Yes your customers may well implement stupidly aggressive retries, but that shouldn't break your stuff, they should just start getting 429s?