The former Barcelona and West Germany player was angered by Celtic's defensive performance, which he said mimicked Chelsea's negative displays in winning the trophy last season.
Shuster, who also played for and later managed nine-times European champions Real Madrid, said the current format of the tournament was wrong and should be changed to prevent the kind of match he watched on Tuesday.
Celtic took an unexpected 18th minute lead at Barcelona, then defended for much of the match before losing when Jordi Alba scored a stoppage-time winner for the Catalan side.
Although Celtic were widely praised for their gutsy rearguard action, Schuster told Spanish radio station ABC Radio Punto: "I'm fed up of seeing these type of matches.
"There should not be teams like Celtic in the Champions League. We saw it last year with Chelsea. It was a very bad example for football and it is regrettable that they became European champions.
"You see Celtic defending with 10 men and almost snatching a point - that is not fair. There should not be teams like Celtic in the Champions League.
"I believe the coach of Celtic viewed many times the video of Chelsea last season against Barcelona. He decided to repeat the system, but the ultra-defensive system is not football.
"Chelsea have now generated a school for teams like Celtic to study. It would have been unjust if a team that defended with 10 men had taken one point in the home of the best club in the world.
"UEFA needs to change this phase of the competition if they want to breathe life into the Champions League."
Schuster, 52, who played for the Barcelona side beaten by Steaua Bucharest on penalties in the 1986 European Cup final, is currently without a club after leaving his job as manager of Besiktas in Turkey last year.
