No your not deluded for thinking that Wenger won't ever challenge for the PL/CL again. While it's something I disagree with, I can see the argument and why you think it, and its only an opinion after all, I don't think your claiming he definitely won't - just that in your opinion he won't. I do think your passion for the subject comes over too strongly and can sometimes be taken the wrong way. (though I don't want this to come across as sarcastic or as inciting another argument, it's not my intention!)
I think your opinion is deluded is your dismissal of the CL and being in the top rung of the PL (and by top rung I mean one of the biggest clubs, finishing in the top 4 spots in the league) and how this has affected the teams position and ability to compete. I think its deluded that you seem to believe that a club without a sugar daddy or the global reach (certainly in early 2000s when we started looking at building a stadium) of teams such as Man U and Liverpool, would be able to compete and and finish in the top rungs of the league, or hold onto its best players without the income generated (and the prospective income) from a new stadium.
And finally I find it deluded that you keep claiming to want to see progress while at the same time moaning about and dismissing all the things the club has put in place to create progress, or to build a platform for this progress - such as buying WC players like Sanchez and Ozil, or developing the funds to buy these players, and allowing us to compete on a global scale without being a selling club.
I'd say finishing 4th with Sanchez and Cazorla is a lot more pleasing than finishing 7th/8th and selling Walcott and Kos.