Now there is no way that if the download speed dropped to 512Kbps could it be considered correct if our contracted speed is 3Mbps!
Actually, it could.
What is considered correct is a commercial matter, no doubt formally defined contractually.
If you were, for example, to read BT's specs for their DSL services in the UK, you would be fairly surprised at what is considered acceptable.
You also have to bear in mind that ADSL (and particularly cheap home user ADSL) is NOT a guaranteed service. There's contention, packet shaping, rate limiting and all sorts of other magical stuff going on behind the scenes to ensure the providers can stuff as many punters onto the same pipes as possible.