Exchange Server down - empties my contacts list

I sync over the air my email, contacts and calander between my Exchange account at work and my iPhone.

Last night I took our our Exchange server down for some maintenance. While it was doen I wanted to make a call using my iPhone, but found that my contacts list was empty. Once the Exchange server was back up, my contacts list was once more available on my iPhone.

Is this the way it is supposed to work? Seems a bit strange that my contacts list would try to sync with the server when it is down, and decide to empty itself as a result? I would have thought if it could not connect with the server it would just not be able to sync for updates, but would keep the data already there?