Actually, it's a matter of interpretation of the rules. I think no referee in the Premier League would have disallowed that goal.
And on another matter, I think a team is clearly superior to another when it clearly wins. Why should a team with a defense like Cole and Campbell rush mindlessly to the attack only to please the crowd? They managed to make a goal that was disallowed near the end of regular time, and another goal in extra time, hardly playing only in their goalie box. England was no Italy. Even playing so much so much as you say in the english area, the Portugal didn't do more. Cristiano Ronaldo simply couldn't pass Cole. With Rooney on the field and a little more luck with the penalties it would have been a whole different match and you would be all here cheering Beckham and co. I've seen a wonderful match between two even teams, that ended with a nearly even result. No domination on either part. Very few matches in this tournament can be defined domination, Sweden-Bulgary comes to mind. That is not what I saw tonight.