The Citizens boss came out fighting in his latest press conference as he answered questions about his team's collapse in Madrid.
City were 1-0 up on the night and 5-3 up on aggregate as their second leg approached stoppage time. However, two late strikes from Rodrygo took the game into extra-time, before Karim Benzema's penalty sealed the win.
Guardiola was asked whether his side are capable of winning the Champion League - a question which provoked a lengthy response from the Spaniard.
He said: "I don't know. It's a question I cannot answer. Before Madrid I don't know. Sometimes you ask me questions but I don't have the answer to all of your questions. Football is incredibly unpredictable. We saw it.
"Maybe I'm not good enough to help the team to do it. Nobody knows what would have happened with other players or managers. For us, it is an honour to be there as much as possible in all competitions.
He added: "We were close, not close enough because the team deserves it, so Madrid are in the final because they deserve it.
"Next season we will try again, knowing is so difficult. Because the teams are good. Just count all the teams behind us in the quarter-finals, group stages or who didn't qualify. How good they are and they are not there. I know the people want us to do it, since day one I will have to handle it."
Guardiola also rejected any suggestions that City's semi-final exit was a 'failure'. The 51-year-old hit back, saying: "I'm not saying it is a failure or not. People say if this group of players won't win the Champions League, they will be failures. I accept it. I completely disagree.
"In sport we know how difficult everything's but I accept it. I'm not going to make a debate about who is right or wrong. I say as a club, as a feeling that we have, we start and try to do it."
"I completely disagree"
The City manager also revealed that his team are yet to discuss the events in Madrid.
He said: "Of course we are sad. We didn't talk because everyone was sad that we couldn't do it. Above me, the players wanted to play in the final of the Champions League, but for this club to compete against Real Madrid the way we did it is a joy.
"I won't forget one week ago the way we played against them, how close we were to making it. But we could not do it, we had to go there and make chances. We were good, but not good enough because I give a lot of credit to what the other team are.
"Congratulations to Liverpool and Madrid because they are in the final because they deserve to be there."
City will now turn their attention to Newcastle as they look to close in on the Premier League crown. With four games remaining, Guardiola's men are just a point above Liverpool.