Schmidt's troops raced into an early 10-0 lead at the Liberty Stadium thanks to an Ian Madigan penalty and a converted Lao Auva'a try.
But the Welsh region came back strongly and the boot of Matthew Morgan, coupled with a second-half try from the in-form Eli Walker, turned the game on its head as Ospreys ended up 19-10 victors.
And with a third of the season now already gone and Leinster not in the play-off places Schmidt knows that his side are now faced with the very real possibility of missing out altogether come the end of the season.
"We are sixth in the league now and I'm pretty uncomfortable with that position," he said. "I would have preferred to go into this [autumn] break on a far better note.
"There are now seven or eight teams in the mix for the play-offs and it's going to be a mad scramble to make it."
"Credit to the Ospreys, Morgan kicked well and it was a great break by Richard Fussell for the try and that was the pivotal moment in a see-saw game.
"We are incredibly frustrated. We thought we had the dominant scrum but the referee didn't see it that way. It reached the stage where even when we were going forward three or more yards, the penalty went the other way."
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