I, too, used to think that we should avoid knee-jerk reactions. But this sort of failure is recurring too frequently. I think we should begin the process of rebuilding the team seriously. Focus should be on skill/talent as well as commitment and fitness.
To begin with, forget about winning the world cup. We are not going to do it anyway. Get rid of players who are in the team purley on past glory. Get rid of Sachin and Sehwag. Get rid of Greg who has turned out to be highly disruptive. Retain Rahul as captain but make either Yuvi or Dhoni a very active vice captain. Non-performers like Irfan should be dropped.
Then we would be making a real start towards building a good team