Rovers, who took the lead through Frederic Piquionne, were eventually undone by goals from David Murphy, Chris Burke and Marlon King, meaning they have just one win in 15 games and are staring relegation from the npower Championship in the face.
Saunders said: "I thought we played really well again. The first 20 minutes we kept the ball and scored a great goal. But they are a really good team. The schedule we have had this week has been ridiculous."
Rovers have not been helped by a cruel fixture list this week that has seen a trip to Southampton last weekend, a midweek journey to Crystal Palace and then this fixture being brought forward due to a race meeting at Doncaster Racecourse on Saturday.
Saunders added: "We went to Southampton last week and that was five-and-a-half hours back, then to Crystal Palace in midweek. That was four-and-a-half hours back and we got back at 3.30 on Wednesday morning.
"We got them in Thursday but they couldn't do much and they have had to go out against a Premier League team in effect and play like it was a cup final. Once they got the second goal we didn't have anything to give."
It could have been a much heftier victory for Birmingham had King and Nikola Zigic not rattled the woodwork, but despite going behind to Piquionne's header in the fourth minute, Blues always looked the likelier to emerge victorious.
And boss Chris Hughton puts that down to their quick response to falling behind.
"There were pivotal moments in the game and our response to them scoring was excellent," he said.
"We tried to get hold of the game and responding quickly was important. Then when the game opened up we looked like scoring and we did. With them playing in midweek we'd hoped that as the game went on we'd get stronger and we did. In the end we could have even had more goals."