Momo Sissoko and David Trezeguet struck for Juve, leaving Ballardini to concede his team were a step below in class.
He said: "We are a young side, we lack a bit of experience and a little strength. The real difference between Palermo and the big clubs is that to win we have to be at the top of our game.
"The giants have players who are able to turn a match with a moment of brilliance, even when the team isn't playing at its best.
"It was a good performance and Palermo had more than a few opportunities to put Juve under pressure, but today it went like this.
"You cannot leave a side like Juventus space, as they are deadly. We allowed [Momo] Sissoko too much room on the first goal."