The Swansea City manager told the official website after the game "It's probably the most disappointed I've been since coming here,
"We didn't do enough tonight and we should have seen the game out.
"The two points I made at half-time was that we needed to get the second goal and get tighter around the box. We did the opposite.
"We defended very poorly for the goal, which is a surprise because we've been strong all season. You can't afford to give the league's top scorer any room because, as he proved, he'll stick the chance away.
"We just switched off, but full credit to Watford they stuck to their task and when there is only one goal in it you've always got a chance.''
With Norwich winning at Leicester to move joint second with the Swans, and Leeds picking up three points at Preston, it's still too tight at the top to call.
"Hopefully it's a good lesson to learn with 10 games to go,'' added Brendan. "We are not that good that we can't afford to work hard and do the nuts and bolts.
"We've got to enjoy where we are, but we've got to do the ugly bits as well. We didn't do that tonight and I haven't had to say that before this season.
"With the results going the way they did again tonight, it may look like a point gained and a point closer to where we want to be. But it doesn't feel like that. It feels like we've dropped five points over the last two games.
"Without sounding arrogant, we expect to win our home games. We know how to win games, but we need to find that killer instinct again to kill off games.
"We've put ourselves in a fantastic position, but we've got to find the other ingredients and attributes to kick on.
"It's going to go right to the wire, so we've got to go again at Derby on Saturday.''