United withdrew from the Cup due to their participation in the Club World Championship in Brazil. Many critics slammed the decision, claiming that it did more than anything else to devalue the game's oldest cup competition.
The Red Devils also went on to win the Premier League that season by a massive 18 points, helped by their two-week South American mid-winter break.
"It turned out to be a disaster for us," Ferguson told Inside United.
"We did it to help England's World Cup bid. That was the political situation.
"I regretted it because we got nothing but stick and terrible criticism for not being in the FA Cup when really, it wasn't our fault.
"The FA and the government felt that playing in this tournament would help England's bid to host the 2006 World Cup.
"There was a lot of undue criticism – but it was a great two-week break."