Did you use the Zorro plugin or your own software for Kraken's API? Problems with overload I can confirm, they concern not only to the API but also to web services. I guess these exchanges have never seen such traffic before Bitcoin & Co. became 'public' latest with BTC Futures releases and in the days before.
I was using the API in my own software.
Yes, the website was giving all sort of problems as well.
Actually, the malfunctioning on Kraken was already quite massive in August/September.
About the BTC Future releases... They surely gave an additional kick to the traffic increase, but the growth of the cryptomarket was already extremely fast months before: that was in fact one reason why BTC Futures were introduced in the first place.
In any case, speaking about arbitrage, I can say first hand that it was quite profitable in the last months, mostly when operated between fiat and cryptocurrencies. One of the most annoying difficulty doing that, however, is that you get all sorts of delays/issues due to the interface between the banks and the cryptoexchanges.
