McDermott was sacked last month as the team's manager by new owner Anton Zingarevich and has recently taken charge of Leeds United after being replaced by Nigel Adkins.
"I was very sad, I would have stuck with him," Madejski, who still serves as the club's chairman, revealed at the Soccerex conference in Manchester.
"But Anton knows far more about football than I do and he decided to make the change. At Christmas time we went to try to buy players and didn't manage it.
"People have this perception that there are players out there who can just be bought and settle in straightaway. It's not as simple as that."
Reading are currently bottom of the Premier League.