I wouldn't put the blame on Ancelotti or the players, because the team lacked the quality of a good defense and midfield due to injury on their players which started in the beginning of the season. Ancelotti has done his best for the club and he has to leave, let someone else take over. If a coach continues winning trophies, no club would replace him.
Nobody expected so many defenders to be injured, and Ancelotti certainly doesn't want to be in that situation. But strangely, when it happened, and he had the chance to fix things (when the January transfer window opens), he did not take advantage of the opportunity, and it was as if he underestimated the problems they were facing. So for that reason, Ancelotti is indeed to blame for their failure.
I think that's the reason why he stepped down, because he felt he had made a mistake that made Madrid fail to win a trophy.
Dude, Ancelotti did his best. He isn't to blame for last season's defensive struggles.
He works his best with the squad he's given. Yes management always accepted the advice and cooperation of the coach, but 55 defensive injuries over 3 season & more than 2000 days lost is not Ancelotti's fault. I have even seen midfielder Tchoumeni playing in defense in several matches.
Since their midfield and forwards are already elite, now they need to strengthen the defense. So this season, Real Madrid is going to add Trent Alexander-Arnold and Dean Huijsen to the squad. They will make the backline more stable, I think.