Can't tell if that was more or less embarassing than Spain's loss.
Depends on your point of view. Spain is individually maybe the best team, they got beaten by one of the second row teams. With Germany against Portugal, like Lager said, the Underdog lost. Personally I'd say the difference in talent between Germany and Portugal is bigger than between Spain and the Netherlands. Portugal is a good team, but Germany was still the favourite by far.
On the other hand, Spain was equal to the Netherlands for at least one half and the big scoring difference was partly explained by a decision by the referee, a huge mistake by the spanish goalkeeper and individual errors in the spanish defence. Also the netherlands played fantastic in the second half. So the game ultimately wasn't a just a bad performance by Spain, but lots of things coming together.
In todays game, germany played good, but Portugal was awful the whole game through, they never had a chance to win this game and really had only one proper chance. So while they weren't supposed to win this game like spain was, the way they lost was more embarrasing too me.