Troy Deeney saw red minutes after Pierre-Emerick Aubameyang's early matchwinning goal.
Gracia felt that it was unfair to dwell on the result after what he felt was an impressive team performance from Watford under difficult circumstances.
He said: "We've competed really well with ten players today, so my players don't deserve that we only speak about the result.
"It's true they got the points, but for us in my opinion we had a good performance. We dominated the game.
"To play with ten players against Arsenal was very demanding for us. I think we tried and showed our spirit our character, creating chances when we were able to do it - one hit the bar, one the post and other chances.
"It was tough for us, but today I think my players deserve recognition and not only for us to be speaking about the result.
"They made a big effort and I'm very proud of them."