Goals from Marcos Alonso, Eden Hazard and former Gunners captain Cesc Fabregas sealed a 3-1 victory for Antonio Conte's side on Saturday, with Olivier Giroud's late header serving as scant consolation.
The result leaves Arsenal 12 points adrift of the Premier League leaders and only one above fifth-place Liverpool with 14 matches left to play.
And Wenger - who watched from the stands as he continues to serve a touchline ban - says his side's defensive nous and creativity in attack left much to be desired, and suggested the 2-1 home loss to Watford the previous Tuesday had damaged their belief more than he thought.
"That defeat against Watford had bigger consequences, maybe, than expected," he said. "We didn't create enough. In the final third we didn't look dangerous enough.
"That was difficult to watch from upstairs. I'm not subdued. I'm disappointed and angry because we lost a very big game.
"The title's slipped further out of our hands and there's no hiding that.
"Certain players individually were not at their best and when you are very young and inexperienced and there seems to me players who are not playing at their best level, well that hurts.
"There were players who know Hazard well and know very well that you don't let him get up a head of speed and we were very naive."