Nate
I couldn't begin to suggest what might have happened with your unit - but as you have found out first hand, RAID1 is not a backup - not only can the unit fail, but data can be deleted or erased, and with RAID1, it's gone from both disks, it also be corrupted by a virus, etc.
It is possible that the DNS-323 has died - it might be an idea to pull the disk and then power it up and hold the reset button down and then power it off, reinstall the disks and power it back on.
Imagine a situation where you're running a small office, you and maybe two other people and you're storing data files on your DNS-323, two separate disks, no RAID1 - and just before you finish an important project, the drive fails - you were just about to print that final report and hand it over to the client, now you have to change the drive, restore the data and then pickup where you left off.
Can you meet the deadline?
Same thing - but - with RAID1. The drive fails, a yellow light comes on on the front of the DNS-323 (which is on the other side of the room near the printer - in fact the printer is plugged in to the DNS-323), you click Print & OK and when the printer is finished churning out that stack of paper, you get up and walk over and pick it up - and that's when you notice the yellow light.
With RAID1 you stand a better chance of meeting the deadline - it'll take more than just a failed disk to stop you.