Friendlies are much more important at international level than at club level. Its essential for managers to get tactics and team selections right before the big time. And do win against the world cup champions and the number 1 team in the world is certainly not meaningless.

Hoddle was tactically quite good but his man management left a lot to be desired.

Also, your comparison national team call ups doesn't really make much sense. Firstly, it is certainly possible in a certain sense, wasn't there talk of Almunia being called up for England at one point (snigger)?
Secondly, throughout the history of football there have been foreign managers who have spread their philosophies in other football nations. No, a good coach does not need to be of the same nation and banning foreign managers is not only pointless but also detrimental to the football development of several nations. If there is any rule FIFA need to look at, its video technology (sigh, Blatter).

Also, the football world hasn't stood still since 96. The physical approach is not going to get you far in international tournaments. A bit more tactical efficiency is required if England are to win a major trophy.