The tournament hosts entered Saturday's game hoping to restore some pride following a 7-1 semi-final drubbing against Germany, yet were undermined as first-half goals from Robin van Persie and Daley Blind and Georginio Wijnaldum's stoppage-time effort ensured Van Gaal's men took the dubious honour of finishing third.
Not even the presence of talisman Neymar on the bench, albeit not among the substitutes due to the broken vertebra suffered in the quarter-final against Colombia, could rally Brazil.
However, there are few positives for Brazil - whose defeat further consigned their efforts to a dark chamber in their nation's rich footballing history and leaves coach Luiz Felipe Scolari facing an anxious wait over his future.
Such a result seemed farfetched when Wesley Sneijder picked up a hamstring injury in the warm-up, Jonathan de Guzman deputising.
The striker was instrumental in the move that brought the spot-kick, his clever ball freeing Arjen Robben, who was pulled back by Thiago Silva.
Things quickly went from bad to worse for Brazil as David Luiz's dreadful headed clearance from De Guzman's cross gifted Blind the simplest of finishes after 16 minutes.
The hosts did at least threaten an equaliser, Paulinho and Luiz somehow failing to get on the end of Oscar's wicked delivery across the six-yard box.
Brazil's hopes of getting back into the game were undermined by further poor refereeing, too, as Oscar was booked for diving in the area having been brought down by Blind.
Even if the penalty had been given, a Brazil comeback seemed unlikely, with a campaign that initially carried such hope ending with a whimper when Wijnaldum powered home Daryl Janmaat's cross in the 91st minute.
