Murray, whose side also went down 2-1 to Germany on Sunday after an opening 2-0 win over Japan, went as far as saying that the hopes of some players reaching the squad for the Beijing Olympics in August had been dashed.
"Some of the players have played themselves out of Olympic selection," blasted Murray.
"I am very disappointed with some individuals who need to do some soul-searching and they need to do a great deal more.
"We are missing in the forwards, and some senior players need to lift their game.
"It is in the character of some individuals that they are not performing and showing the awareness and knowledge of the game I expect and it is time they showed what they can do.
"Argentina markedly outplayed us and they deserve the win and congratulations, but I am very, very disappointed with my players," Murray said.
Argentina coach Gabriel Minadeo expressed his satisfaction with the quality of his side's play.
"We've had one of our best matches in this tournament so far as we played with confidence but there is still room for improvement in defence and in the need to concentrate for the full 70 minutes of the match," Minadeo said.
Argentina scored from its fourth penalty chance, Noel Barrionuevo putting a one-bounce flick to the left of Australia goalkeeper Rachel Imison to lead 1-0 at the break.
Megan Rivers equalized for Australia with a deft goal inside the left post from an in-bound pass by Madonna Blyth near the right backline seven minutes into the second half.
But Rosario Luchetti converted Argentina's fifth penalty corner to pull the South Americans clear once again.
Australia's equalizer from a penalty corner with 13 minutes on the clock was disallowed.
Germany fought hard to win 2-1 over Japan from a scoreless first half.
Anke Kuhn pushed in a goal from in front of the left post 5 minutes into the second half, finishing Janne Moeller-Weiland's move along the right backline to get the pass in to Kuhn.
Natascha Keller drove a backstick shot from the left of the circle off a long pass from Fanny Rinne to inspire Japan to go for the equaliser in the last 14 minutes.
Japan's intense pressure brought a goal to Chie Kimura with 10 minutes to play, and Japan almost over-powered Germany with speed, skill and most of possession in attack but could not get the equalizer.
Japan coach Seung Jin Yoo accepted his team could not convert pressure into an equalizer.
"In the last 10 minutes you can see the difference between the quality of Germany, which is a very strong team, and Japan which is not so strong," Yoo said.
Germany coach Michael Behrmann was relieved to take the win.
"It is always a hard fight with Japan," Behrmann said.
"In the last 6 matches with Japan, Germany has drawn or lost," Behrmann said.
"We had to work hard to hold on to the victory, and we are happy we won today," Behrmann added.
In Wednesday's matches, China play Australia, both needing a win to stay in the race for the finals, and Japan meet Netherlands.