O’Neill was withering in his criticism of his players’ efforts after they were outplayed in a one-sided quarter-final replay that saw Nikica Jelavic put Everton on course for Wembley before David Vaughan’s own-goal sealed their fate.
"There were high expectations having done so well to get here but it doesn’t matter whether you are home or away you have to be able to perform,” said O'Neill.
“You have to be able to pass it, you have to be able to control it, you have to be able to do those things under pressure and we didn’t do it well enough. We had opportunities to play but when we did play we didn’t play well enough.
“When you keep passing and keep missing it becomes really frustrating and the crowd become frustrated and we get frustrated with ourselves. We should be able to pass the ball better. We should be able to control it better. And for us it was just very disappointing.
“The cup run was great and we should have been able to have continued it, particularly having home advantage and that is disappointing and I am very disappointed myself but the players since December have done very well indeed.”
No Sunderland manager has ever got the better of David Moyes while he has been in charge of Everton and O'Neill insists the Toffees were worthy of their victory.
“Everton were better than us and they deserved to win the game,” O’Neill said. “We didn’t perform well enough; we didn’t perform at all and that is really disappointing.
“We were ready for the night and to see the sort of atmosphere before the game and the noise level is something that should be experienced more often here. It was a great night for football and we disappointed.
“The first goal was very important. Everton were very strong. I didn’t think there was much between the sides until they got the goal but of course that was a major point.
"We had the ball at least three times in the build-up to the goal and the second goal knocked the stuffing out of us. But that said Everton were better than us.
“We should have done better. This morning the players were in great spirits and so it is hard to take. We had such a big incentive to get there and we didn’t do it. It is difficult to play.”