I think Spain fell into the trap of being too loyal to players who had won stuff in the past and not giving the new generation a fair crack. It was the same with France in 2002 when they wheeled out a load of old champions who were past it (Desailly, Lizarazu, Petit, Djorkaeff and even Lebouef) when they had a new generation ready to go (Sagnol, Gallas, Silvestre, Dacourt, Lamouchi, Giuly etc).
Picking Torres ahead of Llorente and Negredo was a mystery. Even though he was part of the old guard, David Villa was a striker they had who could make good runs off the ball and add some pace to the attack. Spain looked very pedestrian. Casillas has been on the wane for a good while, as has Xavi. I was surprised that Mata and/or Fabregas didn't appear against Chile.
As for Chile, I did tip them to go through but I thought it'd be at the expense of Holland.