You shouldn't lose the upgrade once it's completed. When you deplete the item & restock you should have it at the upgraded level. Destructive items are used in fights. Each time you attack, you lose a Destructive Item. The below is directly from the Help Section in Zombie Slayer:
Special Items
Special Items are those acquired through jobs, power up purchases and from The UN. Special Items are used by your Top Squad members but can also be used to arm yourself to give you a stronger attack and defense in Fights. Some Special Items, known as Destructives are not armable but give you an extra advantage when attacking in Fights. Each time you use a Destructive it will be lost.