A couple of comments.

1.  The web.config is automatically backed up whenever the installation routines are run to ensure that we do not lose old machinekeys.  So even if you did not personally make a backup, the system does perform a backup of the web.config on its own.

2.  The next version of DNN has improved the detection routines to determine when a site needs an upgrade versus the database just being offline or the system having a minor hiccup when it can't connect to the db for a split second.  In the case where the system determines that you already have a currently installed version (marked by the presence of InstallationDate key in web.config, log files in the dataprovider folders, HTML module folder in DesktopModules) then the system shows a simple message stating that the system is down.  The detection routine weights each factor a little differently to come up with a confidence score since some users may delete log files or may uninstall the HTML module because they have another third party module they prefer to use.  Also, if the user is running on a local machine, then the system defaults to the upgrade behavior rather than the "error" behavior since often during testing/development a developer is capable of making the decision to cancel the upgrade and fix the problem if an upgrade is not the desired behavior.