Perhaps one of the difficulties experienced by PSG so far in the Champions League is from the competition factor of the teams in the French Ligue 1. We know that the competition there is not as competitive as in other leagues in Europe. PSG almost every season wins the trophy, even if there is a superior team, the points difference will be tight. But when PSG is dominant in Ligue 1, the points difference will be quite large.
Even with the effort to bring in top world players, they still failed to bring home the Champions League trophy. This season, I think it is much more difficult for PSG.
PSG has not been able to find the right coach, even though they have brought in some top players, like last season where they had Neymar, Messi, Mbappe did not make PSG strong in the Champion League they still failed because the team's mentality is still bad in this competition.
Competition in the Champion League is very tight if a team experiences poor performance then the team will not be strong to advance to the next round.
Maybe it makes sense what you say PSG only dominates in the domestic league only this is not much equal, so still this will win every season for the domestic league.