Yes, if the Manchester City owners give Pep another chance, maybe he can prove something good by overcoming his problems. Although Man City's performance has declined a lot at present, they need to come up with new strategies to improve their performance. It is not right to judge the failure of one season, we have seen that Pep Guardiola brought Manchester City from a bad position to a great position. And what has brought this team great success, so it would not be right to fire the coach, but it is best to give him another chance.
Manchester City must know that no coach can succeed forever and no coach can change his tactics to be adaptive with time and responsive tactics from opponents. This explains that success of any national team, any club only last for several years and when their favorite tactics is gradually constrained by opponents while their main players also become older and play worse with time, their successful era comes to the end.
Don't think that rebuild a new squad is easy, and even it can be done well, a main challenge is changing or upgrading your tactic, this is very difficult and most coaches fail to do this well.