I'm not sure I disagree with the fact that it's a mistake, but I certainly disagree with vehemency. Hart was on extremely shakey ground this time last year, on the heels of a very disappointing season. The idea was that we needed to sign competition for Hart -- somebody who could legitimately lay a claim to the starting keeper spot -- rather than a backup keeper. Willy was one of the best keepers in La Liga two years ago. He was relatively cheap, by City standards. It's easy to be revisionist on the back of a good season from Hart, but there's an argument we wouldn't have gotten the best out of him without Willy.
Again, not sure I agree with wasting the HG spot on our current second-choice keeper. Comparing it to Santa Cruz is ridiculous though, even if it's just hyperbole for the sake of it.
I can't find the quote but i'm sure Hart has praised Willy's contribution in making him a better player this season.