Melville’s side needed to beat the French champions emphatically to have any chance of a Heineken Cup quarter-final place from Pool Six - a result which would also have given Munster a home quarter-final draw against Newcastle.
However, Gloucester were unable to do either themselves or Munster any favours, being crushed 27-0 at a sold-out Kingsholm.
They conceded all their points during the first half as Stade marched on towards a home quarter-final appointment with Rob Andrews’s Newcastle.
Although the second period proved scoreless, Gloucester had no chance of retrieving a huge deficit after Stade scored tries in a damaging 11-minute spell from wing Christophe Dominici, centre Stephane Glas and flanker Mauro Bergamasco.
“That was probably the worst first half in my coaching career,” said rugby director Melville.
“I was embarrassed by the first half, I have to admit that. It was unacceptable from our point of view.
“As a coach, you always have disappointments. Today was a game when the odds were stacked against us, but there was no need to chase the game as soon as we did. We have lost a lot of respect with our supporters, who have been absolutely fantastic, and we have to earn that respect back.”
Gloucester’s season could conceivably go off the rails following such a major setback and next weekend’s PowerGen Cup quarter-final appointment with West Country neighbours Bristol Shoguns now assumes huge importance.
Stade simply prospered from a succession of Gloucester blunders, and Melville added: “We gave them three tries.
“We didn’t play the way we wanted to in the first half, and the game was gone by half-time.
“People were trying too hard, and the three quick tries cost us dear.”
Gloucester coach Dean Ryan added: “We didn’t respect field position in the first half, and that showed. Some people got carried away with trying to chase things when it was about creating pressure and being in touch at half-time.
“There is no simple answer, the players are not robots and they react to what is happening on the field. We are disappointed with what has happened, and we need to talk that through for the future.”
: Goodridge, Garvey, Fanolua, Paul, Simpson-Daniel, McRae, Gomarsall, Bezuidenhout, Parkes, Vickery, Eustace, Brown, Boer, Hazell, Forrester.
: Sigley for Bezuidenhout (58), Buxton for Eustace (55), Balding for Hazell (44). Not Used: Elloway, Page, Mauger, Bailey.
: Henandez, Arias, Glas, Liebenberg, Dominici, Skrela, Pichot, Roncero, Blin, De Villiers, Auradou, Brouzet, Rabadan, Bergamasco, Sowerby. Replacements: Sarramea for Henandez (74), Poulain for Skrela (61), Filol for Pichot (67), Marconnet for Roncero (52), Kayser for Blin (77), James for Auradou (55), Martin for Sowerby (58).
N Williams (Wales).