The Wallabies head coach was fuming after the 29-26 defeat, particularly after the suspicious clear-out from replacement Lions flanker Jac Morgan in the build-up to the match-winning try scored by Hugo Keenan.
Morgan flew into a ruck that was contested by replacement Wallabies flanker Carlo Tizzano, who was attempting to win a turnover, with the contact sending the latter flying out of the ruck.
While the incident was reviewed, referee Andrea Piardi and his officiating team deemed it to be a fair clear-out, which Schmidt clearly didn't agree with when speaking to Wide World of Sports in the aftermath of the game.
"We led for 79 minutes and I couldn't quite believe that we didn't get a decision at the end to lead for 80, but you know that's the wicked backlash that sport can have sometimes," he remarked.
"I think it was described as arriving at the same time and we can all see that's not the case. We can all see clear contact with the back of the neck which might be a different decision on another day and another time."
The veteran coach couldn't hide his disappointment, adding: "I'm just gutted. I've been gutted a few times in my coaching career, but that is right up there. Sometimes you just don't get what you earn, and I felt we earned more than what we got."
Speaking in the press conference after the game, Schmidt maintained his stance that it should have been a penalty against the British and Irish Lions.
He pointed to law 9.20 (b), which reads: "A player must not make contact with an opponent above the line of the shoulders."
He said: "I think everyone can make their own decision on that.
"You just have to read Law 9.20 and you just have to listen to the description from the referee and then watch the vision when two players are described as arriving at the same time. Just watch the footage."
Pressed about how the match officials got such a big decision wrong, from his point of view, Schmidt conceded that it was just part of being human.
"They are human," he replied. "Players make errors. Match officials make errors.
"Our perspective is we felt it was a decision that doesn't really live up to the big player safety push that they are talking about. You cannot hit someone above the levels of the shoulders and there's no bind with the left arm, his hand is on the ground. That's what we have seen. We have watched a number of replays from different angles, so it is what it is. We just have to accept it."