United plummeted out of the competition on Wednesday night after a 2-1 extra-time defeat to Dougie Freedman’s team in the Old Trafford clash, after Darren Ambrose'e sublime 40-yard strike gave the Eagles the lead.
Whilst Ferguson conceded that the Championship outfit gave a good account of themselves, the 69-year-old noted his disappointment with the display from his side.
Ferguson told MUTV: “My apologies are to the fans tonight, because that was not a Manchester United performance.
"I don’t want to take anything away from Crystal Palace, I wish them every success and I hope they get to the final because it was a fantastic mammoth effort by them tonight. Every one of their players worked their socks off to get the semi-final and I’m just very disappointed.”
Palace secured their place in January's semi-finals, where they will face Cardiff City, thanks to Glenn Murray's header in first-half extra time, a goal Ferguson believed to be offside.
“When it went to extra time I thought we must win it, but it wasn’t to be. Obviously the second goal was offside from what I’ve seen, we’re not getting any luck from linesmen just now, but I can’t take that away from Crystal Palace, they fought hard to get the result and they deserve it.
“They [Palace] played their part, it was a hard, hard game, a physically hard game. They started well for the first 10 minutes but then we got a lot of possession and didn’t do anything with it, I don’t think their keeper had a save in first half.
“We maybe played too much short passing, not enough spreading the game but I’m not going to dwell on it all, at the end of the day we’re beaten and it’s a very disappointing night for Manchester United.”
The Scotsman handed young striker Federico Macheda a start in the game, whilst Paul Pogba and Ravel Morrison both featured in the second half for United.
He said: “It's hard to come on when the team is not playing well, so it was a difficult night for them but it won't do them any harm."