The hosts knocked out the French giants with goals from Andre Schurrle and Demba Ba, leaving the coach to lament the absence of injured striker Zlatan Ibrahimovic.
Les Parisiens headed into Tuesday's tie with a 3-1 lead from the Parc des Princes opener, but goals from Andre Schurrle and substitute Demba Ba ensured that the 2011-12 European champions clawed into the last four at PSG's expense.
Blanc insisted that the two European giants are equals and that his side performed well at Stamford Bridge, but acknowledged it missed injured star striker Zlatan Ibrahimovic as PSG was dumped out on away goals.
"We lost out on qualification with just five minutes to go," the manager told Sky Sport. "We had done well, then Schurrle's goal galvanized them. We tried to play our game a lot of the time with a high level, but also with a lot of physicality. They are stronger than us physically but we did not suffer much from this aspect.
"Both teams have been shown to be on the same level, but maybe they have more experience. We need time to grow — there is so much time to grow as you cannot become greats in a year or two. Obviously, based on today, we can think Ibrahimovic's absence has affected us. We haven't failed though, Chelsea just leveled it."
With European soccer now behind it, PSG is expected to win Ligue 1 before the end of April after opening up quite the gap over second-place Monaco.