They certainly had good enough players to do well, i.e. reach the 2nd round and come somewhere near to reaching the final. They didn't even pick their best players, though. It was the 1977 team (very good) not the 1978 team until they finally put Souness in for the last match. A lot was made of Willie Johnston (brilliant in 77, crap in 78) being picked ahead of John Robertson who had just been one of the stars as Nottingham Forest won the League. But Robertson DID play in the 2nd match vs. Iran and he was also crap. Above all the SFA should get far more blame than they did - utterly shambolic and amateurish preparations.
We've heard that nonsense much more recently - and not just from wildly over-confident Scots