England reached a modest victory target of 199 with 11 overs to spare, captain Michael Vaughan and all rounder Andrew Flintoff both scoring fluent half centuries.
"I don't think you can just say we weren't good enough on the day -- I think we played badly," Smith said.
"We got off to a reasonable start but we didn't capitalise on it. A couple of good catches stuck for England and on another day they go for four. But we lacked a plan with our bowling.
"We've been so good in the last few games but today, perhaps because we felt we needed a wicket every ball, we weren't patient enough.
"At 30 for three we needed to build pressure with Flintoff coming in and we weren't able to do that," he said.
The result meant little in terms of the tournament itself as both sides had already qualified for Saturday's final at Lords. Despite this, Smith said defeat was still hard to stomach.
"It's no less bitter. The only reason that it could be better is that it happened today and we've got just under a week to learn from it. Again, we can go back and put things right.
