A disappointing night for the Premier League outfit in the capital saw them crash out of the FA Cup after suffering a 3-1 defeat in a fourth-round replay at Selhurst Park.
In truth, Wolves were second best throughout the contest and could have few complaints about seeing their cup dreams dashed.
A second-half hat-trick from Danny Butterfield put them to the sword, with Karl Henry's consolation coming too late to turn the tide.
McCarthy admitted afterwards that Palace were full value for their comprehensive success, with Wolves never in contention.
Well beaten
"I should congratulate Palace," he said.
"They have beaten us and beaten us well. They thoroughly deserved it.
"We didn't mark for the first goal and after that it was a downward spiral.
"We were out-thought and out-fought. I didn't see it coming.
"But I'm not going to condemn my team - I've already done that to them personally."
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