I agree -- although I am sure you could write a system that manages config diffs, testing, backups and reporting in Fabric, it won't be pretty.

My current workflow for managing systems does use Fabric however. I maintain configuration using a custom framework and work under git/hg -- Fabric tarballs the tip, syncs the tarball to several dozen servers, and then runs and my configuration module on each server. I did use a bash script previously though.