Actually I don't understand. You're saying not conceding goals doesn't mean you have a good defense, but then I'm left puzzled, so what is the purpose of defending if its not conceding goals. All this time I've been watching and playing football I've thought the purpose of defending was to not allow the opposition to score.
Peps teams have always conceded less goals in league competitions than their competitors, even at Barca he conceded less goals than Mourinho's Real Madrid every season IIRC. At Bayern his defensive record in the league was just as good as Heynckes. The problem with Peps teams defending, is that when they are forced to defend in their own area, and when you find a way to beat their press and counter them, they'd concede a lot in those games. Of course when you look at it overall, that doesn't happen very often. So all in all, the possession football his teams play are a very effective defensive strategy.
I think it had more to do with his style of play. His results ever since he took over should have taken Everton to Europe if it were not for his predecessors terrible results. But I think as always, his style of play did not resonate with the players, and the fans also turned on him.