You need to know that irrespective of AC Milan's performance is the serie A, they played very competitive side in their last two matches. Like Juventus, Juventus isn't a joke at all despite the fact that they are not too consistent but at least when you hear Juventus in the serie A we are talking about one of the biggest club in Italy, so Milan result with Juventus cannot be questioned at all. Okay what of Paris Saint German, PSG has also been a very strong contender both in France Ligue 1 and the Champions League respectively. PSG has lots of experienced and talented players who are ready to devour any team they meet so you can see that AC milan played against two strong contenders in their last matches and tagging them as a disappointment to Italy is not a good one
I agree with you, in the last two games played by Ac Milan, they have faced teams with good squad, teams that shouldn't be considered weak at all and so their performance against this team alone shouldn't be used to see them as been disappointing so far, it's really not an encouraging results so far from AC Milan not been able to get a goal yet in the UCL but they happened to be in a group with relatively good teams so it's not going to be really easy.
PSG isn't a small team at all both in their domestic league and the UCL, they have so much experience with the UCL, they have participated in the UCL several times and can't be undermined, moreover they were at home and AC Milan played from away so you shouldn't expect that PSG would loose easily or concede a goal at home in the UCL, if AC Milan fails to qualify further in the UCL they can fall back to their local league where they are doing well too.