The Owls manager said that his team were punished for making the kind of mistakes they often get away with in the Championship.
"First half, we were always in the game. I think we frustrated them and we looked compact," Sky Sports News quotes him as saying. "One thing you do know is you'd probably get away with the odd mistake in the Championship.
"There was a couple of mistakes tonight, and decision making - suddenly you're punished and you're 2-0 down. Suddenly it's 3-0 nine minutes into the second half and its damage limitation, with ten men as well."
Holders City will now face Newcastle United in round four.