Carlo Ancelotti has what it takes to do well, we don't understand some of his choices but he certainly had his reasons.
He has successfully coached teams of the calibre of Real Madrid for many years, and i think he will be able to do well with Brazil too.
I am very sure of it.
Managing a national team is not as easy as managing a club side. Real Madrid has quality players from every nook and corner of the world. Brazil national team is not like that. So he need to adjust with whatever resources that he get. On top of that, he need to deal with egoistic and eccentric players such as Neymar. Bringing discipline in a team that has no sense of team bonding is going to be his first challenge. Anyway, they have only two matches remaining, and that too against weak teams (Chile and Bolivia).
Yeah, what you said is the absolute truth, managing and or coaching a national team is completely different and way more difficult than coaching a club, and the reason you gave is very valid, finding good players for a club is easy because there is no such bound or limitedness in the sense that a player from Nigeria( for example) can not play for Brazil and a Brazilian player as well can not play for the Nigerian super eagles, and it is exactly like this for every other countries as well, so theres is a limit and every country has to make do with their own players and not get a player elsewhere outside the country.
And speaking of Brazil in particular now, the coach will simply learn to deal personally with all the players, learn them and now how to treat each one of the based on their individual attitudes, this is one way of becoming a good and successful coach.
They have a great advantage, Ancelotti has much more feeling with these players because he has seen them grow up in the clubs and he has launched many of them himself, so it will not be a problem for him to select them and make them play well in the national team, in addition to the fact that he is a great coach and personally he can give a lot to the team.