Ancelotti puts the best at the moment and if no one better than Modric, Benzema, Kroos and Vinicius, then it's the club's problem that he spent the transfer campaign that way. Ancelotti squeezes the maximum out of the squad that he has, most of the players are already old and nevertheless, in principle, Real Madrid can fight to the end if they want, but they can't do that in every match. The same way to beat seemingly outsiders is not easy and that's why sometimes such strange losses to 1-0 happen to Real.
Barcelona had a much better transfer campaign which resulted in a lot of young players who can keep up with the rapid pace of the game, playing both in La Liga and the Champions League, and then in the Europa League. Hence the result in the championship, but Real can still win the Champions League and then Ancelotti can also buy good players if he is lucky.
I would agree that they are still the best even at that age, but they are a level that is hard to catch, it is not other players problem that they are not as good as Modric for example, not many people in the world could be better than him, there are like maybe 10 names you can count, probably not as many.
This is why it is going to be him as long as he keeps this up, but we all know eventually he will get too old and stop playing this well and he will retire, so they need to be ready for that anyway, and they have amazing midfielders for that position as well. Their midfield is not an issue, they locked that in with young players, they need defenders and one striker, that's their future issue, specially striker.