I agree with you, I believe Arsenal are a good team but they are not yet the team to compete in the Champions League and win the trophy. They might not fare too well against tough opposition in the Champions League. To do well in the Champions League tournament or to secure the final, the best performance is required and we may not be seeing that best performance from Arsenal right now. We could see PSG with Manchester City Real Madrid Bayern Munich in the semi-finals of the Champions League.
When Chelsea won their first Champions League about twelve years ago many people never believed they would make it to that level. They just sacked their coach and appointed an inexperienced Roberto Di Matteo after sacking Villas-Boas. But the team was united and made it to their first-ever Champions League title. Arsenal have a good team made up of both young and experienced players. Mikel Arteta has been able to motivate these players to become warriors. They might not be as exposed as other top teams but I dont doubt their ability to come up with some surprises. If they have luck behind them, we might see the Gunners in the semi and even the finals.