So has the old upgrading system been removed? I can't seem to just make what I already have placed better. I have to destroy it and put a whole new building there?
Yeah, the old system doesn't work now that you're considered to be touching every building the sprite covers instead of just the one in the middle. Plus the old system was a bit clunky with how larger buildings would only expand to the right anyway. An important exception are platforms, which can have the blueprint for upgrades placed and built on top of them.