Reading's hopes of a play-off place were always remote although they finished well short against Watford who had only recently celebrated their escape from the relegation zone.
Reading needed a victory and a sequence of other results to put them in the top six but it wasn't to be.
"It was always a long shot but it would have been nice to finish with a victory. We've brought quite a few supporters here but frankly it was very disappointing," said manager Steve Coppell.
"It's some time since we played as badly as that. We never really troubled Watford who worked hard and played well. Our players worked hard but we just couldn't make any impression."
For Ray Lewington and his men it was a case of finishing with a flourish. They scored a shoddy winner but in reality had plenty of subsequent chances to have racked up a convincing victory.
Only Reading keeper Jamie Ashdown stood between Reading and a humiliating defeat. He pulled off three good saves in each half to deny what appeared to be certain goals.
Ashley Young, who has come on twice before and scored for Watford, was substitute again and hit the winner. His 20-yard shot which went through the legs of Graeme Murty owed much to Bruce Dyer's lunge. Dyer failed to make contact but it wrong-footed Ashdown and the ball bounced on into the net.
Reading produced only one on-target attempt in the 90 minutes but came close in the first minute of the second half when substitute Paul Brooker sent in an angled shot that deflected off the impressive Lloyd Doyley for a corner.
Watford's Dyer had a number of chances in the second half but was denied by Ashdown. In the first half Heidar Helguson and Young had also been frustrated by the visiting keeper.