The holders suffered their worst European home defeat on Tuesday as two goals each by Madrid's Sergio Ramos and Cristiano Ronaldo saw the Bavarian giants crash out 5-0 on aggregate.
Having previously never lost at home by more than two goals in Europe, Bayern saw their dreams of reaching a third consecutive Champions League final crushed in what chairman Karl-Heinz Rummenigge dubbed a "debacle".
"We lost heavily and we had only a few chances," admitted Guardiola.
"We played badly and that's my responsibility. If you don't play well and you defend set pieces badly, that's just how it is.
"We are playing at the highest level in Europe, and such mistakes are punished right away."
Ramos exploited Bayern's weak set-piece defending with two bullet-headers from corners before Ronaldo grabbed two more, setting a new record of 16 goals in a single European campaign.
But Bundesliga champions Bayern are more concerned about their record defeat as Guardiola said he made a mistake by selecting Bastian Schweinsteiger alongside Toni Kroos in the defensive midfield.
Things improved after the break when Guardiola moved Schweinsteiger into the attacking midfield with Javi Martinez taking his place alongside Kroos.
"I told the players during the break that I had made a mistake," said Guardiola.
"We knew how Real played, so we always wanted to have a lot of possession and players in midfield.
"We couldn't control the defensive midfield in the first-half and didn't put in a good performance, because the coach made a mistake.
"The players ran and tried hard, as they always want to do, but we didn't have the right players in the right positions at the end of the day."
Despite Bayern boasting a star-studded squad, Guardiola questioned whether he has the players for to his brand of quick-passing, possession-orientated 'Tiki-Taka' football.
Guardiola claimed his side did not have enough possession to be effective against Real, but the stats undermined his argument as his team had 69 percent possession, compared to just 31 to Madrid.
"Of course, we have to consider whether we have the right players to play this style of game," said Guardiola.
"I like to have possession and we lost because we didn't have the ball, simple as that. I can only say we have to reflect on this and gather our thoughts. We have to talk about this as a club."
Having won the Bundesliga title in his debut season at Bayern with a record seven games to spare, Guardiola's side dropped just four league points in eight months before their league title was confirmed with a 3-1 win at Hertha Berlin on March 25th.
Since then they have dropped eight in just five weeks and the sudden dip in form of key players, plus their undignified Champions League exit, will concern club bosses.
But Guardiola's side can still win the domestic double and face rivals Borussia Dortmund in the German Cup final on May 17th.
"It's a tough night both for me and the team, but taking criticism is part of the job," he said.
"You can't be satisfied after a performance like that, but we have to stand up and prepare for the German Cup final."
Captain Philipp Lahm admitted the squad would need time to recover.
"This is a big disappointment which we have to analyse, but there is no need to speak ill of what we have achieved over the last two years," he said, after Bayern won the treble of European, league and cup titles last season.
Dutch winger Arjen Robben said the Bavarian giants now have to pick themselves up for Dortmund.
"We have been punished tonight, but we have to lift our heads, because we have a cup final coming up.
"We took a beating, we have to accept it, cry about it, go home and then move on."