I hear you, deep runs in CL should be standard given the squad they have, and the amount of money they have invested. But to be honest, lately when I look at City's squad, I'm not overly impressed. I feel like they don't have star quality all over the pitch. Off the top of my mind Hart, Kompany, Silva, Yaya, Aguero all stand out for me, the rest are just pretty good players. To go deep into the CL, you either need to have amazing players all round, or gel together exceptionally well (which I don't think City do as well as they should).
If City won the league, there's no way I would call for Pellegrini's head. CL or not, he would have one a very very difficult and competitive league.
I agree with everything you're saying about City. I feel the same way. To me the positions are out wide, They're missing a top quality winger/s. Jesus Navas was a quick fix but not a game changer. For example if City had gotten Di Maria, I would have said City have it locked in the EPL.
I don't see City winning this year and if they have another underwhelming CL, think its a wrap for Pelle. You almost have to let him go. Plus, dudes never really proven much, never saw him as the permenant managers going forward anyways.