Switzerland, who had beaten European champions Spain in their opener, could have reached the second round with victory over the Central Americans but rarely looked like scoring.
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In the end, they finished with just one goal scored and one conceded in their three games. Honduras finished bottom of the group and failed to score in the tournament.
Spain, who beat Chile 2-1 in Pretoria, finished top and will play Portugal while the Chileans came second and face Brazil.
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The Swiss, despite being more physically imposing, were very disappointing and strangely displayed a lack of zest given the high stakes while Honduras played the more attractive football.
HUGE DISAPPOINTMENT
"We are very disappointed, not just me, the players, everybody," said Switzerland's German coach Ottmar Hitzfeld. "We had great ambitions for this match. It was too much of burden for them and it got more so during the game.
"We got more nervous and failed to pass properly. We did have some opportunities but not great opportunities. I'm not happy with our midfield or our forwards.
"We haven't lived up to our expectations. We failed to deliver because we had too much pressure. We had to score twice. It is a huge disappointment for me. We didn't have the stamina, we didn't have the perseverance."
"We were lucky Honduras failed to finish their counter-attacks properly. The defence was excellent. We had to open up but the defence was excellent."
In truth, Honduras, for whom Ramon Nunez looked dangerous, unlocked the much-vaunted Swiss defence often and better finishing would have seen them a goal or two up by halftime.
"I think the players knew well the importance of this last game. They knew what this game meant for the nation," said Honduras coach Reinaldo Rueda.
"They really showed their courage and brought everything they had. We shouldn't have waited until the last match to show our talents, we should have done it in the first match."
FIRST CHANCE
Honduras started well but the first chance of the game went to the Swiss when captain Gokhan Inler shot wide from just outside the penalty area in the 10th minute.
Chances went begging at both ends. In the 38th, Wilson Palacios raced through the middle but was dragged down by Gelson Fernandes, who earned a yellow card for his efforts.
The best chance of the half fell to Swiss striker Blaise Nkufo just before the break, who chested down a cross from Eren Derdiyok a metre from goal only for the ball to bobble away.
After the break Honduras threatened when striker David Suazo failed to put away a diving header in the 52nd which would have given them a deserved lead.
Hakan Yakin, on for Fernandes, should have done better in the 59th but shot tamely. Tranquillo Barnetta and Derdiyok also both wasted good chances when well-placed in the Honduran box.
Likewise at the other end, Edgard Alvarez wasted a good opportunity with only goalkeeper Diego Benaglio to beat.
Switzerland coach Ottmar Hitzfeld brought on team captain Alexander Frei for Nkufo in the 69th minute but he could not break the deadlock as the match finished goalless.
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