Re: my web host did this to me - would would you do here?
I agree, they should have notified you that they were going to remove your site, they didn't handle it in the most professional manner.
However, in their defense, your lack of updating your site leaves them vulnerable to security issues that could affect other accounts on that server, so they were looking out for everyone. Your insecure, outdated site could have allowed the compromise of hundreds of sites on their server.
My advice to you is to suck it up, and rebuild your site on a newer version of Joomla. It's your responsibility to maintain back-ups of your site and if you don't have any to use, then that's nobody's fault but your own.
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