I agree with most of that in principle but would argue your view on the squad being decent.
Whilst i don't think he got the best out of some of the more talented players in the team (which i would say confirms your view on him being a poor manager) once you lose a couple of those from your starting 11. There was very little to come in and do a job. This has been his problem since day 1 IMO.
Even those better players - Cole, Parker, Upson and Green create a bit of debate as to their quality.
Before Zola got there no one spoke about Carlton Cole as a guy with quality and Scott Parker has played some of his best stuff in the last two seasons. Green is nothing special and Upson is good but nothing more. It wasn't much of a squad to be fair.