Glen Murray headed home an extra-time winner. Ferguson, who had made 10 changes for the tie, paid tribute to the visitors but was far from impressed by the performance of his own players.
He told MUTV: "I don't know where to start to be honest.
"My apologies are to the fans because that was not a Manchester United performance.
"I don't want to take anything away from Crystal Palace. I wish them every success and hope they get to the final because it was a fantastic, mammoth effort from them tonight. Every one of their players worked their socks off to try to get to the semi-final.
"I am just very disappointed."