Wednesday's goalless draw at home to Juventus meant Barcelona suffered a 3-0 aggregate quarter-final loss.
There was no repeat of Barca's stunning comeback at Camp Nou, having fought back to eliminate Paris Saint-Germain thanks to a 6-1 second-leg thriller in the last 16, as Lionel Messi, Luis Suarez and Neymar were nullified by the Italian visitors.
While disappointed, Iniesta said the focus was now on beating La Liga leaders Madrid at the Santiago Bernabeu on Sunday with titleholders Barca three points adrift.
"We were not as effective in front of goal as usual and that cost us," Iniesta said.
"It's a disappointment to be knocked out of the Champions League but winning the league relies on winning in the Bernabeu and that is our intention."
Barca team-mate Sergi Roberto – who scored the dramatic winner against PSG in the previous round as the Spanish champions overturned a four-goal deficit – added: "The fans got behind us until the last minute, like another player, we needed their support to turn the tie around. We thank them for their support and we battled until the end.
"We created a lot of chances but nothing would go in, if it had, we would have been in the tie.
"We leave disappointed. We have to be critical and look at the mistakes and approach the end of the season in the best possible fashion. We still have the league and the Copa del Rey and every game will be decisive."