So your main issue is that the team is missing a player whom could be the difference in winning the champions league or not, which is understandable.
For me it is even more important than that, we are talking about a player who also makes eaiser for not to f**k up our changes of winning the Premier League, FA Cup and/or the League Cup. Any fan who takes a pragmatic look at how we performed in recent games will see that you cannot rely on the same 3-4 group of attacking players for every single game with the sort of performance levels Pep demands out of each of them. Hence the loss to Liverpool (despite their still terrible defence) and our struggles to beat teams like Bristol City.
Losing a quality player who you've been looking at for a while to a direct rival is disappointing but those two instances are where the disappointments of not getting him ends.
If we are going to be knocking United off their perch, allowing them to improve their squad is going to undermine our attempts at suceeding in that, which in turn undermines the clubs attempts to put itself on a long term financial footing.
Solely looking at this season, the team has more than enough in the league and cup competitions without him
Last time I checked De Gea, Lloris, Sandro, Rose, Alderweld, D.Sanchez, Vertongen, Alaba, VVD, Trippier, Bellerin, Kante, Fabinho, Pogba, Alli, Winks, Coutinho, Lemar, Neymar, Hazard, O.Dembélé, Salah, Kane and Dybala are not playing for Manchester City. Now if they all where then I would be more than happy to agree with you on that statement (1), but the fact is that what we actually have is nowhere near enough for this club to be in a position to win the Quadruple on a regular basis, which the club needs to be aiming for the sake of its long term financial future.
(1): I know you are directly talking about the 3 domestic competitions, but the thing is that we are also competing in the Champions League as well, which makes it harder to compete in the 3 domestic competitions in question.
and although he would've definitely added to the chances of winning the champions league its not a disaster if the team fails to win that competition this season.
To be fair though, we need to be doing a lot better than we have been over the last ten years (with all the investment that has come though) in this competition. After all reaching the R16 only twice and progressing beyond it only once is simply not good enough for a club of our stature (1), let alone one that is aiming to be among the best. Hence why we need players like Sanchez to improve our record, let alone actually winning it.
(1) In comparison, Chelsea during the first 10 years of Roman Abramovich's time at Chelsea reach the R16 9 seasons out of 10 (and the one time they did not they ended up winning the Europa League), the Quarter Finals 8 times, the Semi Finals 7 times, the Final 2 times and of course actually winning it once.
Imo pep is building something special with this side with a base of young players who are not even near their peak.
I am very happy in what he has managed to do with the players he has currently got and yes many of them have a lot of good years ahead of them, the problem is that there is nowhere near enough of them to reach the sort of levels this club needs to achieve and unless we fully address the issue of strength in depth, this problem is going to continue to undermine us season after season (it has already undermined us to a great degree so far) while denying us trophies we need to be winning on a regular basis.
I'm certain there will be plenty of chances in the future to win the champions league
There is no point having all those chances if you don't have the strength in depth to actually capitalise on them, which is something you actually need to be able to win a European Double (let alone a Treble/Quadruple) in the first place as Real Madrid showed last season.
and there will be better alternatives lined up when the inevitable happens and aguero calls it a day.
Yes there are of course, problem is that they cost even more than Sanchez will this time round. Besides as I said before, even if we got those better alternatives, we would still need Sanchez under those circumstances.
It seems from your point of view you think this is the best chance for the team to win the champions league and adding sanchez helps that while I happen to belive the team has enough currently even if they fail this season there would be plenty of opportunities in the near future with some of the young talent in it.
If we are struggling to beat Liverpool when the going is getting tough (i.e. now) with the players we have, then we have no chance against the likes of Barcelona, Bayern Munich and PSG. Teams we would need to beat (or rather at least one of them) this season or even in future seasons (1). That is why we need to strengthen our squad with every opportunity we have, not allow our rivals to take the League Title from our hands or win the FA Cup instead of us.
(1) Especially when winning the league is going to be harder in future seasons than in this one.