The excavation of a site involves its destruction, either partially or completely, in just the same way as it would be destroyed by a road builder's bulldozer. The only difference is that archaeological excavation is controlled and aims to carefully reverse the sequence of events that have led to the formation of the site where, as a result of human activities, deposits have built up gradually through time (stratigraphy).
'In theory, it should be possible to reconstruct a "virtual" site from the records that have been made ...'
Some individual activities may leave very obvious traces. A line of mortared bricks or stone is easily recognised as a wall, and even if it's been removed may well have left traces of its foundations. A hearth may show only as a patch of reddened soil and a few flecks of charcoal, while a change in land use from pasture to cultivation may only be recognizable in far more subtle traces, perhaps only in the colour and texture of the soil.
In a controlled excavation, starting at the modern ground surface, such events, represented by their layers and structures, are removed in the reverse order in which they built up. In the case of total excavation, everything that is the result of human activity is removed until undisturbed natural bedrock or subsoil (referred to as 'natural') is reached over the whole site.
During the removal every change in soil colour, texture or components that can be observed is recorded by means of drawings, photographs and written notes, while artefacts and samples are collected for later analysis. In theory, it should be possible to reconstruct a ‘virtual’ site from the records that have been made during an excavation even though the site itself no longer exists.