Having fallen to the foot of the Premier League at the weekend, the west Londoners were in desperate need of a morale-boosting victory in Tuesday night's fourth-round replay at Craven Cottage.
Instead, the Whites' miserable season reached a new low as Shaun Miller's last-gasp header secured the side 23rd in League One a 1-0 extra-time victory.
It was an insipid display from the hosts and one which manager Meulensteen admitted would leave them facing "big problems" if it was repeated.
Asked if this was the worst performance since he succeeded Martin Jol, he said: "Yeah, definitely.
"It is very disappointing. It is as bad as the weather - the result, the outcome, the performance. That sums it up. It was a poor night all-round.
"It is no big secret (why we performed like this). When you get into a situation where the results aren't going for you, when you are playing well and putting in a lot of effort, bit by bit it keeps knocking your confidence and what you saw today was a team that lacked confidence.
"You could see that in some of the performances. There was not enough cutting edge and quality at times.
"Then you see trends in the game, really, that you don't want to see in terms of the way I want to play.
"We knew Sheffield United would work hard, get a lot of bodies behind the ball.
"That is not an excuse and we had to break them down. On the night, it wasn't good enough."
The frustration amongst the Fulham faithful was audible and highlighted when Hugo Rodallega was jeered off the field when substituted in the second half.
The Colombia international appeared to take the reception personally as he sat head-in-hands on the bench, but Meulensteen downplayed that incident.
The former Manchester United coach also dismissed speculation over his future.
Bookmakers make Meulensteen favourite to be the next manager out of a job, fresh on the back of reports that technical director Alan Curbishley could be drafted in as his replacement.
"Listen, (the owner's confidence) will only last until that is gone," Meulensteen said.
"Until that time, I will just keep doing the job the best I can. I have no worries in that respect at all."