Yes just look at Barcelona and how they have been doing the last few years. Regardless of winning the title last season, in my opinion they were not part of the highest elite group anymore as they weren't playing this level that is unreachable for most others. They have had a good season and Real Madrid wasn't playing well in La Liga, which is why Barcelona could win the title. Now they are struggling in La Liga again and got lucky with their Champions League group, but I don't think they will be around in the semifinals of the Champions League.
If you look at Barcelona's current performance and even overall in the last few years, it is natural that the Barcelona team is no longer favored to compete for the UCL title, and I agree with you if you say that Barcelona is currently not one of the elite teams in Europe. they are really in a very bad state and there has been no progress in the last few years.
So this season it is quite logical if we predict that Barcelona will not go further and what happened in the group phase cannot be a reference because their opponents in the group phase were weak teams and Barcelona was a little lucky to join group H.
Of a truth Barcelona is not really in their best this season even for the fact that they have tactical and talented players but yet they struggle to win matches even win with low goal difference unlike Barcelona before that wins with high goal difference in their matches but despite the fact that they haven't really shown their best this season i still applaud their performance so far like for them to be in the third position in the league table means they are still in good form as they are just 5 points behind the league leaders Real Madrid.