I have the same problem. I also agree that it is NOT when regular maintenance is going on, but when there is an unexpected error. It is literally at that time that access to my contact list is the MOST essential.
This isn't solely Apple's issue considering you're syncing a Microsoft server with their competitor's phone. This is not to say that there is no MSE support, because there is and sometimes people even say the iPhones support of MS systems are sometimes better than their own (ie: with an Apple server).
The iPhone is setup only to behave the way the MS server tells it to behave. It takes two to tango.