Your computer> Hi, server! Am I running a valid copy of Windows?
Server> ::checks:: Yes, you are.
::life goes on::
Server> ::checks:: No, you're not!
::Your Windows install is considered counterfeit, features are disabled::
So, since no one can actually reach this downed server right now, all Windows installs are coming up as counterfeit.
This brings up an interesting thought. Perhaps... perhaps the WGA server also has Windows installed on it. Windows installs have to verify their validity with the WGA server on a regular basis. Therefore, the WGA server has to ask itself- constantly- whether it is real, whether it exists. Now, WGA is down. When it asks itself, "Am I real? Do I exist?" it receives no answer, and can only conclude, "No, I am counterfeit."
The WGA server is going through an existential crisis.