You handled things fine. If you were out of your car and pulled a pistol you might have caught some heat. But since you were in your own vehicle, and did not point the gun directly at him, and your exit was blocked off by his car, you can say you were in fear of your life, had no means to flee, and readied your pistol in case he had a weapon on him. Nothing you did was wrong as the police said.
This same exact thing happened to me. I was driving down a 2 lane road, pulled into the left lane to pass, and the guy sped up and cut me off. I pulled back into the right lane, and there he goes again and cuts me off so I cant pass. I finally was able to pass him, and at an extremely high speed I might add, and he ended up following me. I pulled into a gas station after being followed for 5 minutes to see if he actually was following me, and he pulled up behind me in my parking space and blocked my exit. I locked my doors, cracked my window to see what he had to say, and grabbed my pistol and held it out of sight next to my right thigh. He proceeded to tell me I was driving like an A-hole, even though he was the one playing games not letting me pass, and said he was guna kick my ***. When he grabbed for my car handle, I pulled my pistol into sight and layed it on my lap, and told him if he didn't leave I would call the police. He then said "you are lucky my 3 year old daughter is in the car or I would kick your ***", and left. This really surprised me that one, he was driving so erratically and playing road games with his daughter in the car, and two, that he parked his car horizontally behind mine, leaving his 3 year old daughter in the car, and then proceeded to try to pick a fight with me. The fact that he would put his daughter in harm like that blew my mind.