The PL doesn't seem amazingly strong to me this season. Two top teams are having mediocre seasons (United and Chelsea). So is last season's upstart (Newcastle). Liverpool are rebuilding and don't look a formidable team. City "feel" weaker than in previous years but people are (correctly) rating them highly because they believe they'll show up when it matters. This is the context Arsenal is competing in, and they're third with 52 points in 24 games.
This performance extrapolates to 82 points at the end of the season, which objectively falls below 'title winning performance', as the PL is rarely won with point tallies as low. So to the extent that Arsenal (or Liverpool, or City) are 'competing,' it is because no one has been up to par yet. We can see this by comparing to other leagues. Barcelona and Juventus have a similar amount of points as Arsenal. But they are not seen as 'competing' because the top teams in La Liga and Serie A have 60+ points so the gap is seen as unsurmountable.
I don't have much of an issue with the claim that Arsenal are "one of the best teams in Europe," as that is ultimately just semantics, different people have different definitions. But surely you can understand that it comes across as arrogant to say "Arsenal are basically in the semifinals already" or "name a team that would beat Arsenal."
