Coach Pitso Mosimane (pictured) admitted he had changed tactics and played for a draw in Saturday's final qualifier at home to Sierra Leone, thinking it was sufficient to win the group and qualify for the 2012 finals.
South Africa actually needed a win to avoid being eliminated on head-to-head results between the three teams tied at the top of the table, but no one appeared to have studied the regulations correctly.
Despite playing out the draw, they were pipped by outsiders Niger, who qualified for the first time.
More embarrassingly, the Bafana Bafana celebrated their supposed qualification at the end of the scoreless stalemate in Nelspruit, thinking they had done enough to advance to next year's finals co-hosted by Gabon and Equatorial Guinea.
"It's very sad for South Africa because the country deserves to be in next year's Nations Cup. I feel like I have failed," Mosimane told reporters.
The coach, who took over after the World Cup, was under the impression that goal difference was the determining factor to decide the group winners and when he was told that leaders Niger were losing in Egypt, he changed tactics and settled for a draw.
Niger had led South Africa by a point going into the final round of qualifiers on Saturday.
"Do you think I would have left [striker Lehlohonolo] Majoro on the bench and put on a midfielder if I knew that we needed a goal? It doesn't make sense," Mosimane said, before criticising the regulations.
"Africa is a jungle, my friend," Mosimane added. "The European and South American formats are so much better because everything is running smoothly, but it's very difficult to play in Africa."
Mosimane was not the only one to fall foul of a misreading of the rules.
The state-run African Broadcasting Corporation proclaimed qualification and the South African Football Association president Kirsten Nematandani went on television to congratulate the team.
He and Mosimane are now likely to face calls to resign.
The South African FA attempted a damage limitation exercise later on Sunday, sending a protest letter to the Cairo-based Confederation of African Football arguing its team's failure to win top place in the qualifying group was unfair.
"We have noted that CAF has announced that Niger has qualified in our group, despite South Africa finishing on top of the group in terms of goal difference, which is the universally recognised means of separating teams who are equal on points," the SFA letter said.
"We believe that the team finishing top of the log at the end of the competition is automatically determined at the end of 90 minutes play, and that the second place is determined by the other rules," it added in a baffing explanation of its case.
"We will lay out our objection more fully shortly, but in the meantime wish to signal that we intend to challenge this interpretation and application of the rules."
