Following a goalless 120 minutes the game headed to a shootout, which was won 4-2 by the South Americans.
Krul had come on as a substitute for Jasper Cillessen in their quarter-final tie against Costa Rica and made two saves as the match was decided by spot kicks, but this time Van Gaal had used up his three allotted substitutions.
"If I had had the opportunity to substitute Cillessen I would have, but I had used my three subs," he told reporters.
"Really [the defeat] is the most disappointing thing that could have happened. It is terrible to lose like this. At the very least we were equal to them, if not better. It is a disappointment."
The Netherlands will now take on Brazil in the third-place playoff in Brasilia on Saturday.