This was a clear case of cultural divide and the more people speak about this, the more the issue gets complicated. It is a very simple case of culture clash. Greg Chappell belongs to a culture where a non performing players has to make way for a younger player regardless of his stature, experience, achievements, runs, averages etc.
Healy, Katich, Martyn, Hayden, Mark Waugh, and now possibly Ponting and Hussey.
That is not how it works in the subcontinent. If Ganguly or Harbhajan or Zaheer do not perform, or if Sehwag and Zaheer do not work hard enough on their fitness, you cannot drop them. That is the culture in the subcontinent.
Now most people do not understand this and the more they speak, the more crap that comes out. Chappell did not have any personal agenda against anyone. He was just implementing something which he has learned growing up in Australia. He did not realize that this was a whole new culture he was dealing with where things happen differently.