I think they should be able to defend the title,
but I say UEFA cant just change the regulations and let the FA have 5 teams in the CL league
I hate it how people only react when things happen to them, nobody said much about this rule when it happened to Real Madrid a few years ago, and the spanish La Liga handled the problem on their own without pressuring UEFA like this, why can't FA do the same? I know Everton have every right to play in the CL but IMO UEFA has every right not to change regulations.
So if everything stands and Liverpool are out of the Champions League, well then so be it!
Besides, this qualifying regulation is also to ensure that everything is equal, and this is what I mean:
Liverpool basically threw away their League efforts, they played half of how they played in the Champions League which to me seems like they are saving their energy and focus on the CL. Milan on the other hand were on a fierce battle with us, they were drained because they divided their focus, so perhaps, in reality Milan were the better team.
Now with qualifications through league positions, it makes things fair, a team can go for the present and sacrifice the future or go for both which is much harder like Milan did.