Ashton was among a group of England World Cup stars who were photographed enjoying Sunday night in Queenstown's Altitude Bar, which was staging a 'Mad Midget Weekend'.
Security camera footage from the bar also showed Mike Tindall, who had captained England to a 13-9 victory over Argentina the previous day, in conversation with a woman. The footage appears to show the woman kissing Tindall on the top of his head.
The England squad had been given Sunday night and Monday off by manager Martin Johnson, who approved the players' decision to go out and "have a few beers" as a way of relieving the pressure of the World Cup.
Ashton conceded the players may have been naive to end up in the backpackers' bar and the squad have held a meeting to address that, led by England's senior players.
But the Northampton wing said: "We weren't doing anything out of the ordinary.
"There were dwarves there, yes, but that was just the night the bar was having. It was nothing to do with us. We didn't bring them with us or anything like that.
"We just ended up in there. I don't think anything had been organised or anything like that. It was just a bar that we ended up in.
"It's just lads enjoying a night out. We just don't see anything in it and we're concentrating on this weekend."
England face Georgia in Dunedin on Sunday but the issue over their antics in Queenstown dominated Friday's team announcement.
Johnson stated before the team left for New Zealand that he would not be imposing drinking bans on the squad and he stuck by that decision on Friday.
"I don't (feel my trust has been betrayed). We knew they were going out to have a few beers," Johnson said.
"You have got to relieve the pressure and let off steam at the right time. I had no problem with them doing that.
"We all know when you have a rugby team that part of it is the bonding off the field.
"It has been a great World Cup. On the streets of Dunedin and in Queenstown, you have players out and about and engaging with the public.
"I don't want to get away from that. I don't want to have to lock people away and not let them out, or if we do it's in VIP areas.
"If we get to the point you can't go out because someone is going to film you and point the finger at you, it is a pretty sad place.
"I've had my arms around 50 women in Queenstown aged from seven months to 77. Everyone wants to get a piece of you and get their photograph taken with you.
"We either lock ourselves away and don't talk to anyone or we try and enjoy the experience at the right time, in the right place and in the right way.
"You talk about football but I'd much rather be at this event with the atmosphere we've got around it."
Johnson, who has been in contact with his superiors at Twickenham, confirmed there would be no disciplinary action arising from the night out.
Tindall's omission from the England team to play Japan is part of Johnson's squad rotation and is not a consequence of Sunday's episode.
"If there is a complaint and someone says one of your players has acted inappropriately then we will act on it but the manager of the bar says the England players' behaviour was perfectly acceptable all through the evening," Johnson said.
"It was guys out having a few drinks, as other teams have done in the same town during the World Cup. There is no difference it is just the way it has been reported. Rugby player drinks beer, shocker."
Gilbert has released a new line of rugby cleats. The Gilbert Virtuo 8S is part of the exciting new product. Check it out.
The Barbarians are one of the top invitational rugby sides with a long history and classic rugby jersey.
The Nike Tiempo is a solid rugby cleat and one of few styles still made from full-grain natural leather.
The Lions get ready for their matches with this green training jersey. It's what the players wear. Get in the Gear!
A cool looking all black rugby cleat with the high performance adidas is known for. Get in the Gear!
Wear the crest of the British and Irish Lions on your t-shirt. A great look for the summer.
The Lions are ready to get their Australia tour underway. They arrive in Perth on Monday.
The New Zealand All Blacks training jersey for 2013/14. Get in the Gear!
The USA Rugby Pro Alternate rugby jersey is perfect for any fan of the Eagles. Get yours to wear during the summer Test matches.
The NEW All Blacks 2013/14 jersey has arrived at World Rugby Shop. Dare to wear the colors of the All Blacks.