Jackson missed five of his seven shots at goal including one from just wide of the posts as Saracens crashed out of the competition with a 21-15 defeat to London Irish.
Tries from Matt Cairns and Kris Chesney kept them in the game, but Diamond insists it would have been a different story had Jackson remembered his kicking boots.
He said: "Our inability to take three points on a regular basis ultimately cost us the game.
"Jackson is a 90% goalkicker, so we decided to keep faith with him. With the benefit of hindsight, it wasn't the best thing to do.
"We have a top-class kicker in the side, and he should be kicking his goals. He's had an off day, and we have to deal with that."
In contrast, Irish outside-half Mark Mapletoft could do little wrong as he scored all of his side's points slotting seven penalties and missing just one.
Irish withstood a fierce injury-time fightback as Saracens poured forward in search of a converted try which would steal victory.
Saracens scorers: Tries: Cairns, Chesney. Cons: Jackson. Pens: Jackson.
SARACENS: Bartholomeusz, Vaikona, Castaignede, Harris, Johnston, Jackson, Bracken, Yates, Cairns, Visagie, Fullarton, Vyvyan, Randell, Seymour, Skirving.
Replacements: Sorrell for Harris (48), Raulini for Bracken (75), Lloyd for Yates (71), Chesney for Skirving (61).
London Irish scorers: Pens: Mapletoft 7.
LONDON IRISH: Armitage, Staniforth, Appleford, Catt, Bishop, Mapletoft, Edwards, Hatley, Russell, Hardwick, Strudwick, Casey, Danaher, Dawson, Murphy. Replacements: Mordt for Edwards (80), van der Walt for Russell (71), Durant for Hardwick (71), Kennedy for Casey (78), Roche for Murphy (70).
Referee: Sean Davey (RFU).