Darius Henderson's 81st-minute penalty denied Barnsley a fifth win in their last seven league matches, but the Blades are still without a win in their last eight.
Henderson coolly slotted home his second spot-kick of the game to haul his side level after Daniel Bogdanovic appeared to have secured the Tykes a thrilling derby win in the 74th minute.
Anderson De Silva's thunderbolt eight minutes into the second half had given Barnsley a deserved 53rd-minute lead, but Henderson slammed home his first penalty on the hour-mark to equalise.
Blackwell said: "I'm proud of the lads, but another game and two more injuries and you can see we're chasing round having put square pegs in round holes."
Blackwell was concerned this week that he would be unable to field 11 fit players after the loss of suspended skipper Chris Morgan, and Jordan Stewart (calf) denied him of 12 first-team players.
Bennett failed to show after the half-time break having broken his thumb and Kilgallon suffered an ankle injury following RyanShotton's crude tackle just before the interval.
Blackwell added: "(Andrew) Taylor failed a medical at 4.30pm, (Jamie) Ward (hamstring and broken wrist) came through his, but I knew he'd be tired.
"Jonathan Fortune - that's his first game since I don't know when and his first for us after a ruptured Achilles. It was a big test for him.
"(Andrew) Davies got a whack on the knee and normally wouldn't have played on, but had to because there were no defenders left and the biggest praise is reserved for Derek Geary.
"He's been out for 18 months, knee rebuilt and has only trained for two weeks and I've had to put him in. I'm very proud of him."
Blades winger Keith Treacy fired a left-footed shot against the post shortly after Anderson had opened the scoring for the home side, but Barnsley created the better chances and owed parity at half-time to inspired goalkeeper Ian Bennett, who denied Anderson and Hugo Colace in the first half.
Barnsley manager Mark Robins could not hide his disappointment at being denied another league win by two penalties, but stopped short of blaming Lancashire referee Lee Mason for costing his side two points.
Robins said: "It's difficult to know because you're only seeing it first hand.
"I'm sure when I sit down in the cold light of day and have a look they were certainly penalties, but to only draw a game like that after we've played so well is difficult to take."
Robins, who has guided his side from the foot of the table to 15th place since arriving in September, was full of admiration for his side's display in an action-packed derby.
Robins added: "We played really well. We passed the ball well and controlled the game for large parts.
"It was a good game, a decent derby game. They've had a couple of chances, they've hit the woodwork, but they've been given the two penalties."