I may be wrong, but It's not possible for a firmware to kill the controller port. Firmware = software, controller port = hardware. The update only replaces the emulator and the rom partitions, everything else on the OS is kept intact.
I can help to 'rollback' to the original firmware but I don't think it will fix the controller port.
Regarding the update, it was removed from Atgames site for some reason, and it was not clear if it was only because of the misleading instructions or if there is something else... I'm using it with my console and it's working fine for me. Both Genesis controller and the included controller are working as expected.