Manchester city performance this season has been awful and it's no suprise that they're out of the champions league. They didn't play well and doesn't deserve to go on. If they were playing against other opponents then they had a chance of still being in the competition but as it was Real Madrid that they are playing against, there was no chance of them knocking Real Madrid out of the competitive even though some of us thought they could do some miracle and get one more chances of trying to fight for more games time in the champions league. All the clubs left in the champions league deserve to go ahead to the quarter finals but sadly we can only have 8 teams.
Actually they are not that bad, but it cannot be denied that they did not play as well as the previous season. Regarding whether they deserve to be in the top 8 or not, I myself look at the clubs they face in the playoffs. When they face Real Madrid, then I agree that Real Madrid is more worthy to continue in the Champions League. And maybe I would say something different if their opponent in the play-offs was not Real Madrid but a weaker club. I always judge from various sides, and that's what I got from their assessment in the Champions League this season.