Although they enjoyed possession against the already-eliminated Swedes, France were toothless in attack and extremely shaky in midfield and at the back.
"We were not strong enough in the tackles. I think Sweden played with a lot of heart, they gave everything, physically they were much better than us," Blanc said after France sealed second spot in the group on four points behind England on seven.
"We did not suffer up front, we suffered a great deal at the back and also in the midfield. Sweden had a lot of physical impact there.
"I'm going to look at the game again but I think we conceded too much space."
France could have fallen 2-0 down in the opening five minutes when Ola Toivonen and Sebastian Larsson easily got the better of the central defence.
Zlatan Ibrahimovic was then allowed too much space in the area to unleash a delightful acrobatic volley into the net nine minutes into the second half.
"We were dominated in terms of tackles, in the air, on the ground, throughout," said Blanc.
"Sweden had a lot of physical presence and we could not fight that."
Asked what he thought of Hatem Ben Arfa and Yann M'vila's performances after they were brought into the starting line-up for Jeremy Menez and Yohan Cabaye, Blanc quipped: "I don't like to talk about individual performances, tonight everyone was not at the level we expected."
Mvila, however, never reproduced Cabaye's neat passing and Ben Arfa produced a mediocre performance.
To make matters worse, or perhaps better considering the player's performance, Philippe Mexes picked up his second yellow card of the tournament and will miss the quarter-final clash against Spain.
"It is always annoying to pick up a yellow card when you can avoid it," Mexes said.
"It was 65 or 70 metres from our goal. You have to think about it when you're on a yellow card."
France, however, did not do enough to win even though Blanc said they would have deserved to draw 1-1 or 2-2.
"We were too average in too many areas, we could not hope to win this game," he said.
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