The Conference North team were knocked out of the first round proper by Northern Premier League Buxton, into the second round for the first time since 1959. York's wait has only been 10 years, but for a club with their history - much of it tied to this competition - it is still too long.
"From the very start they started better than we did but we had 90 minutes to put that right," said the former Sheffield Wednesday and Newcastle United player. "The players proved last week (in beating Blyth Spartans 4-0) they are capable of performing at a good standard and it's really disappointing that we didn't improve all game.
"They've got some very good players, they're a very good side but it's a huge opportunity for York City to advance in the Cup and the difference in performance from last week really has taken us by surprise because this week's training was better than the week before. The lads looked good, they looked fit, they looked confident but once they started that way they seemed unable to lift themselves out of it.
"We looked second best in the football department, we didn't win anywhere near enough second balls, we weren't locked on to people properly.
"The systems were very similar but even as the game wore on we couldn't get that midfielder that we were finding so easily last week.
"The way we played at the end - I know it was cup football and you want to try and get through at any expense but the way we played at the end - I hate playin g that way but we were left with very little choice because of the poor quality of what went before that."
Of the goal, Watson said: "It was good movement from (Ash) Chambers which a fully-fit and two or three weeks down the line Sean Newton might have seen a bit earlier but the lad who scored the goal (de Girolamo) broke through three or four times and we had experience on the pitch that should have been able to see that. We should have leaders on the pitch who could organise better.
"He is a good finisher and it was a good finish.
"We had the ball in the net, we missed two headers from three or four yards but I'm not trying to kid anyone, that was absolutely nowhere near good enough."
York fans, who called for the board to leave throughout, sang "This is embarrassing" late on and there is pressure on Watson at a club that does not expect to be in the sixth tier, or being knocked out of the Cup by teams from the seventh.
"It's the FA Cup, it's huge for the club and the fans," he said.
"It wasn't one of those days, we were beaten by a team that was better than us on the day and there's really no excuse for that.
"I've got to solve it.
"I genuinely believe there's no better equipped to do what we have this season. I genuinely think I'm capable of turning these inconsistent performances into a run but there's no point saying it, it's all about actions.
"I should feel under pressure.
"I felt under pressure the day I took the job and when I was sitting at the top of the league. I;m not deaf, I don't sit there and kid myself that I can't hear things and I don't get affected by it, and the lads as well. But that's why I'm here.
"I want to be a top manager so you have to get through these spells."