Things for the moment are pretty much back to normal; L3 has repeered Cogent temporarily, announcing the accommodation will be in place until November 9th.
What the flap amounts to is that L3, much larger than Cogent, determined that Cogent essentially was getting a "Free Ride" over L3's network, passing far more traffic to L3 than L3 passed to Cogent. Back in August, L3 advised Cogent that situation would be addressed, one way or the other; "Pay us, or find another way to route your traffic", more or less. Cogent apparently figured L3 was bluffing, and bluffed back; "Oh yeah - whatchya gonna do - shut us off?" L3 responded "Yup, you got it. Deal with this" and depeered Cogent.
Dueling press releases:
Cogent: "Turn us back on and we'll negotiate"
L3: "Fine - You've got 30 days to see it our way"
The injured parties here really are the internet users. The spat between these 2 backbone firms need not have gone to the extreme it did; a couple of alternate scenarios could have played out. For instance, Cogent could have agreed to balance their L3 usage via financial arrangement, or Cogent could have set about structuring alternate routing to prevent negative impact resulting from L3's threatened depeering. Had either of these options been exercised, there would have been no outage. Both options would have affected Cogent's profitability negatively, at least near-term. Neither option was effected, and the internet user took it in the shorts. The ball is in Cogent's court, and with L3's announcement that they would provide a year's free service to any Cogent customer choosing to switch, Cogent hasn't much of a negotiating position.
It should be noted not all internet users were impacted, as many ISPs utilize multiple backbone providers, considering the redundancy a protection against problems experienced by any one provider taking down the multiply-connected ISP's customer network. The outage occurred (and was spotty) because not all ISPs are multiply connected, and with L3's depeering of Cogent, ISPs without alternates, relying exclusively on either L3 or Cogent, found themselves cut off from access to networks solely dependent upon the other's network.