Looking back on this, I think you're right. Obviously this is easy to say in hindsight but not going balls to the wall there and hoping the field takes care of it for you cost them.
I know I am right but not just with hindsight, it was even awful that day and I was very adament back then also although Arsenal supporters were 'celebrating' that result.
I remember being hopeful that day to see Arsenal the challenger beat the champion at their own yard. Man City just cameback from an horrible game versus LFC which they should have lost if not for VAR not doing their job properly or even Luis Diaz not missing on a break away chance but anyway the point was Man City showed they were very vulnerable defensively. From Arsenal POV, they were stream rolling in the EPL, winning everything by huge margin with all the positive plays and ambition you want from a top side and then they went to the Etihad with a prime Mourinho tactic with every players parked in the box and playing counter football. Showing no ambition and being hopeful to catch City off guard and snatch a win. And then the ridiculous... they were praised for their approach by the fans and some media and how they got a point and were now being hopeful to beat Man City by not beating them but hope some other EPL team will do that dirty job instead of them.
If not LFC, I wanted Arsenal to win the title but after that disgusting game I wanted Man City to win. I was shocked by the lack of ambition from Arteta and Arsenal which had the best team in the league and could have won the league that day.
Edit: I would also add that even if Arsenal had tied that game by outplaying Man City in an offensive football affair it would have been more honorable, they would have shown the right mentality to challenge them. And If (worst case scenario for them) Arsenal had lost, they would have made it more clear for them to focus more on the upcoming CL games and might have won it too. At least on paper and from what I have seen, Arsenal had very good chance to win against City that day and it would have sent a message to the whole league that they are the best team in the EPL and today they would celebrate that title win.