I figured out where the problem is. Basically, there are two parts to the Server manager, the first part of the server manager allows you to read site details from configuration file, which is what I've been doing above. The problem with that is you will only able get the information that's in file and site state is not part of it.
The second part of the Server Manager allows you to connect to the IIS directly and it does this by interacting with the COM element. So what I should be doing is this:
ServerManager manager= ServerManager.OpenRemote("testserver");
var site = manager.Sites.First();
var status = site.State.ToString() ;