It doesn't, as so many people have implied, mean that Spain has a stronger league structure. It's just that when you play a team a division below you, you don't know anything about them and you can lose if you get overconfident. Upsets are common is cup football, and we should not make too much of it.
All domestic cup tournaments in England have had upsets, and that's what Real Madrid suffered. It happens every season. Last season, it was Burnley beating Chelsea, Arsenal and Tottenham, and Barnsely before that scalped Liverpool and Chelsea. In the 2007-08 FA Cup, Portsmouth were the only Premier League team in the semis, joined by West Brom, Cardiff and Barnsley.
If you ask me, England has the stronger league. What makes a strong league isn't upsets by third division teams (which happen in any country), but competition in the league.
The last two title races in the Prem were decided on the second last and last day. The last two La Liga titles were surrendered weeks before the end.
And it took quite a while (till the second last day in fact), to decide which would be first Prem team to be relegated.