The Leicester fly-half was brutally honest after England's back division failed to capitalise on a mountain of possession and territory.
Wales were forced to make almost twice as many tackles but England were too predictable in trying to bulldoze their way over the line.
Nick Easter, the Harlequins number eight, admitted England "were not smart enough" in possession.
James Hook then showed England how to be ruthless, scoring the only try of the match and kicking two late penalties to seal Wales a smash-and-grab-victory.
England manager Martin Johnson was furious and Flood said: "I don't want to use the word embarrassing - but it is a little bit embarrassing.
"It hurts, the fact we couldn't score a try. It is shameful. We can use harsh words because if you want to win a World Cup, tries are massive."
England turned down penalty shots at goal and Flood did not attempt a single drop goal, which would at least have been some reward for their dominance and kept the scoreboard ticking over.
Jonny Wilkinson had done just that at Twickenham the previous weekend in England's 23-19 victory over Wales.
But Flood revealed England had a deliberate plan at the Millennium Stadium to put into practice some of the moves they have been working during their seven week training camp.
The fact it did not work - and that none of the senior leaders in the team recognised the need for a change of approach during the match - is now a serious concern for Johnson.
"We could have gone out there and stretched the lead and kicked goals but we made the decision to go out there and see if things were working," said Flood.
"I am not too fazed about the result. It is insignificant compared to the fact we haven't been able to score a try.
"That is the hardest thing for me. That left us in a position where we think there is a lot of work to do over the next two weeks.
"We turned the ball over too much in the red zone. We won't get that many opportunities in the World Cup. We have got to be more clinical there.
"There are a lot of things to work on, a lot of food for thought.
"We are really disappointed and frustrated."
England now have this week off before Johnson confirms his final 30-man World Cup squad on August 22, five days before their last warm-up international against Ireland in Dublin.
England's opening World Cup match is against Argentina in Dunedin on September 10.
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