In principle, nothing so terrible happened, because still, with all due respect to this tournament, but the Premier League and the Champions League are still more important for Arsenal. There are also fewer tournaments where you need to spread your efforts. On the other hand, a title is a title, and it's not at all certain that you will be able to win the remaining tournaments. And yes, the current Arsenal is very lacking in self-confidence, and the title could help to gain that confidence.
Even though Arsenal's game is good, not being able to win the Premier League or the Champions League will not mean anything because the success of a club can be seen from how many titles they have won. In the previous few seasons, Arsenal's performance was good, but they had a hard time winning the title and even couldn't maintain consistency until the end of the season. This team doesn't seem to have a winning mentality and I think it's difficult to inspire a team if they don't have a high mentality and confidence.