Yes, you're right. 300mph would probably be a high estimate.
I believe the test Rusty Wallace did in 2004 is the one to which you're referring:
Rusty Wallace tested a car at Talladega Superspeedway without a restrictor plate in 2004, reaching a top speed of 228 mph (367 km/h) in the backstretch and a one-lap average of 221 mph (356 km/h). While admitting excitement at the achievement, Wallace also conceded, "There's no way we could be out there racing at those speeds... it would be insane to think we could have a pack of cars out there doing that."
It was Bobby Allison's crash at the 1987 Winston 500 at Talladega Superspeedway that forced NASCAR to mandate restrictor plates:
Allison's Buick LeSabre blew a tire going into the tri-oval at 200 mph (320 km/h), spun around and became airborne, flying tail-first into the catch fencing. While the car did not enter the grandstands it ripped out nearly 100 feet of fencing and flying debris injured several spectators.
Just like Carl Edwards' crash, the cars were doing 200mph in the tri-oval and when they spun around they got airborne, going straight into the fencing.
In both cases, debris went into the stands injuring spectators.