All the top teams knocked each other out by the end of the tournament. Not as if one side beat everyone else only to lose in finals.
Portugal beat France (1-0) who knocked out Germany (2-0) who knocked out Italy (shootout) who knocked out Spain (2-0). France, Germany, Italy and Spain were probably the top 4 favorites (in any order) with the likes of Belgium, Portugal, etc as dark horses before the tournament. Portugal also stopped Wales as well as France from scoring in 210 minutes and those two sides were the top 2 scoring teams of the tournament. Portugal kept a clean sheet against Croatia too and conceded only one goal in knockouts (Lewandowski) over 450 minutes while scoring 5.
About the argument regarding qualifying 3rd in the group which would have seen them knocked out in previous tournaments, maybe they would have gone for the 4th goal in the Hungary match if they knew finishing 3rd would throw them out. For the last few minutes Portugal were aware they're 2nd in the group and could move to 3rd if Iceland win against Austria. Hence they probably wanted to stop Hungary winning and didn't mind drawing the match as they would have qualified with 2nd or 3rd place. We can't completely extrapolate the performance of a team under certain rules to a different set of rules hypothetically imo.
They were in the Group of Death only last edition along with Netherlands, Denmark and Germany but they reached the semis losing to Spain in penalty shootout who won their 3rd tournament on the trot. Portugal are possibly underwhelming compared to a lot of previous champions but specific to this edition, I can't begrudge their win seeing no one else blew opponents away. Portugal are not even blessed with a lot of attacking players to blame them for being defensive.
For me Griezmann was the best player overall with Pepe the best Portuguese player (despite missing Wales match), especially in knockouts. That's similar to how I felt during 2014 WC - Robben the best player overall with Mascherano the best Argie in knockouts (Argentina also conceded only one goal in knockouts albeit 1-0 in finals, while scoring 2).
