They invented football and they won a World Cup. They're royalty and so is Italy, even though they failed to qualify. But yeah, they should be considered for what they are now, not for what their history said (which probably is also kinda the problem, people always expect certain teams to be favorites, while in reality they're at a low point in their history).
About Spain losing his coach after the World Cup.... I would assume that while this could hinder a season, the World Cup is a once in a life time event (ok, once in a 4 years old event, but for some it might be the last due to age, and who knows in 4 years if you'll still have a good enough carrer to be capped, or if a May injury takes you out) that the players would try to give their best no matter what.
You can screw up a season because of the coach, but no one is that masochistic to screw up a world cup just because the coach is going or is at odds with the team.