Scott Arfield delivered a superb curling effort into the far corner to claim the local bragging rights for Burnley, after top-scorer Danny Ings had continued his fine scoring form by snatching his 17th goal of the season to put his side in front early on.
Blackpool were never out of the reckoning and Craig Cathcart levelled the scores with a header.
But Arfield lifted the stands and sent the Seasiders crashing to their fourth successive Sky Bet Championship defeat, leaving Ince wondering what more his side must do to the close the gap on the league's frontrunners.
"A draw would have been a fair result but a lack of concentration early in the second half has cost us," Ince said.
"We are killing ourselves and there isn't much in this league between any of the teams.
"To be fair, we have ourselves to blame because we didn't get the basics right after the break after an outstanding first-half.
"We are not going to be up there with the big boys and it is frustrating because we aren't far away from turning that corner but to lose four on the bounce is disappointing.
"It took a wonder goal to beat us but we have to stay positive.
"To lose is disappointing because I thought we were outstanding in the first half. We played some really good football and our response to Burnley's early goal was fantastic.
"But to concede a goal so soon after half-time absolutely kills you. It knocked the stuffing out of us but it wasn't a game we should have lost."
Burnley manager Sean Dyche admitted he could not fault his side's efforts as they ensured they enjoy Christmas Day top of the Championship.
"I thought we delivered another very good performance," he said. "We looked solid defensively, had good energy and we always looked a threat going forward.
"We scored two fantastic goals and showed some excellent quality. It is important to find different ways of winning and then deliver them.
"I am really pleased with the attitude of the side. We put good balls in to the front men and our passing was nice and slick.
"We were very dominant for the first 20 minutes of the match but Blackpool managed to get a foothold.
"But in the second half we continued to do the basics well and used the ball wisely.
"We hurt Blackpool in a lot of different ways. We fought and we competed and Scott Arfield has scored a sublime goal."