To say the defeat of the armada was circumstantial is overlooking the tactics at work. From http://www.historybuff.com/library/refarmada4.html
"While the Spanish Armada battle itself was not decisive, it nonetheless did serve as an inspiration for future English sailors and naval commanders. The English had successfully managed to defend their coastal waters, using clever tactics and a well-prepared defensive navy to scatter a Spanish attacking squadron. Drake himself became a prototype for future English naval captains, and his example inspired the leadership of other renowned commanders like Horatio, Lord Nelson during the Napoleonic Wars"
and from http://www.tpub.com/content/administration/12966/css/12966_11.htm
"Ignoring a chance to attack the English off Plymouth, the Spanish sailed on up the Channel while the English pecked away at them. Although these attacks did little damage, they induced the Spaniards to fire all their heavy shot with no telling effects on the English. When the Spaniards anchored in Calais, the English forced them out by floating several burning hulks down on them during the night. The next day the combined English and Dutch fleets attacked the Armada and might have crushed it had they possessed ample powder and shot. After this upsetting blow, the demoralized Spaniards fled north and rounded the British Isles to the Atlantic. There, storms nearly succeeded in finishing what the English had started."
But I take your point - British power at the time really was quite small, and the Spanish, with their pieces of eight, continued to be a massive naval power for a few good years.