Now things become interesting.
Chances are that your CLI installation got corrupted, but that’s another story.
You can do the whole update stuff step by step
First download the system binaries and bootloader for the Photon from here
Then flash these in DFU Mode
particle flash --usb system-part1-0.7.0-photon.bin
particle flash --usb system-part2-0.7.0-photon.bin
Then in Listening Mode
particle flash --serial bootloader-0.7.0-photon.bin
Then try the this again in DFU Mode
particle keys server
particle keys doctor <insertYourDeviceIDhere>
If this doesn’t help try installing CLI on a fresh machine - if you are using Windows make sure to use the CLI Windows Installer and not npm
With Win10 uncheck the “Install Serial Drivers” (or however it’s called) option as Win10 brings it’s own drivers and is gererally happier with these.