I think the optimism is based on the fact the team is for sure getting better as the young players develop more, and based on the assumption City's levels will remain the same. So if the same City as last season turns up I'd be pretty confident Arsenal win the league.
However the problem with all of that is that whilst it's likely KDB's best days are behind him (Walker also), players like Bobb, Gvardiol etc clearly have levels they can reach so they will improve there. And for all the talk that if Rodri is out City are vulnerable, you can say the same with Rice, Saliba, Saka etc.
I do think Arsenal will win the league but there's a lot of hope in that rather than expectation!