Sergio Aguero scored from the spot to send City on their way to a 3-0 victory after a foul on Silva from goalkeeper Nick Pope.
Although Dyche was unhappy with the decision, he does not believe the penalty changed the outcome of the game and admitted Pep Guardiola's men probably would have gone on to take the three points regardless.
“They are a fine side and I can’t say it affected the outcome," he told reporters after the defeat.
“But although there is contact – and I have seen that there is now - I feel it is minimal. To get that high off the floor with your hands above your head is a skill in itself.
“If I kicked my kid in the garden he wouldn’t fall like that. There has to be a bit of almost what I’d call honour in the game. That’s out of the window because it’s not there.
“It’s a tough one. The problem is when you’re already going down and then there’s contact and then you go down with your arms above your head, which is almost impossible, and it’s frustrating.”
Dyche is upset at diving in the game, but believes that the lack of punishment for Watford's Richarlison after an alleged dive last week indicates that the FA are not taking the issue seriously enough.
"I have brought up my opinion on cheating, the FA has a rule which already does not work already because we saw how it was when the Watford lad was not banned," Dyche said.
“There’s contact but you can’t fall like that as a 13 stone professional footballer. No one seems to want to change it. At end of the day there is contact, I just don’t think there’s enough to fall.
“It’s an important line – I have said I was a centre half and understand gamesmanship, but that was stretching it. It’s a professional understanding of the game, and today is right on the line.
“But I have to hold my hands up and say there was some form of contact, as minimal as it was.”