Although it was clearly a fair shoulder charge, Sven feels City only had themselves to blame after some sloppy defending and passing saw them go 2-0 down.
City were already facing an uphill battle to qualify for Europe and Sven knows the Blues' hopes are all-but-over after failing to win at St Andrews.
"I am frustrated because we are talking and dreaming about Europe and I think we are losing our confidence," he said.
"I am very, very disappointed because I think you have to take at least a point in a game like this, but we didn't.
"It is not possible that we talk about Europe and we don't win a game like this because it was not that difficult. It was not even a physically hard game that we had maybe expected.
"We should win a game like this and you won't do that if you concede 2 goals like we did before our penalty.
"Everything changed from the penalty for them and it's 3-1," added the City boss. "Of course it was not a penalty, anyone can see that. The referee got it completely wrong.
"But before we blame the referee, we should blame ourselves. We can't perform like this if we are Manchester City.
"I don't know how many passes we missed without being pressed. We didn't hold the ball in the 1st half and it's impossible to concede 2 goals as we did."