An exchange which offers an API is subject to flooding attacks either through malice or incompetence.
Automated trades should be forced to operate through a QOS mechanism which limits both individual activity, and the aggregate automated action to a small percentage of total exchange capacity. A fee for API driven trades would also be an effective mechanism to moderate the load caused by automated trading systems.
I maintain that streaming a HD video and decoding it takes more resources than operating the entirety of mtgox on a single machine. Processing an order should be a trivial operation.