City's woeful defending cost them dearly as Monaco recovered from a 5-3 first leg deficit with a 3-1 win on Wednesday that took them through to the quarter-finals on away goals.
Having fallen 2-0 down in the first half, City were given a lifeline by Leroy Sane's goal, which would have been enough to send them into the last eight.
However, City's star-studded and expensively assembled side were badly lacking in tactical discipline as they allowed Monaco to score again, condemning Guardiola to his earliest Champions League exit.
As Guardiola blamed himself for failing to convince his players to attack more effectively during a lethargic first half, it was the 46-year-old's struggle to build a sold City defence that earned him most criticism.
"They were too high, it's pathetic defending," former Manchester United and England centre-back Rio Ferdinand said on BT Sport.
"You have to give yourself the chance to see the ball. If you stay that high you give the guy taking it an area to hit.
"There is no one in there who is commanding that box, dictating to the line of defence telling them where to be. There is no commander in there. That's the problem."
Languishing 10 points behind Premier League leaders Chelsea, City are now reduced to focusing on securing a top four finish and beating Arsenal in the FA Cup semi-finals next month.
Guardiola won't change philosophy despite failure in Monaco
That would be a meagre return given the hype that greeted Guardiola's appointment last year to replace Manuel Pellegrini, the Chilean who managed to lead City to the Champions League semi-finals with much less fanfare.
Guardiola was hailed as a revolutionary who would dazzle the Premier League with his purist principles when he arrived at City from Bayern Munich.
The Spaniard had impeccable credentials after winning La Liga three times and the Champions League twice at Barcelona, then adding three more league titles at Bayern.
But Guardiola has found it much harder to thrive in England, where the competition provided by a host of mega-rich top clubs is far stronger than the opposition provided in Spain or Germany.
Even though City won the first 10 matches of Guardiola's reign, his ruthless decision to axe goalkeeper Joe Hart foreshadowed the turmoil to come.
When it became apparent that Claudio Bravo, Guardiola's hand-picked replacement for Hart, was even more flawed than his predecessor, the Spaniard immediately lost credibility.
Then, on a chastening afternoon in north London, Tottenham manager Mauricio Pochettino out-witted Guardiola in a 2-0 victory that underlined the blueprint for beating City.
Guardiola praises 'mentally stable' City after eight-goal thriller against Monaco
City have never been the same since and Guardiola has become increasingly tetchy, unsettling his players with constant team changes, grumbling his way through media interviews and generally giving the impression of a man uncomfortable in his new surroundings.
The nadir seemed to have come at Goodison Park in January when City crumbled to a 4-0 defeat that ranks as Guardiola's heaviest as a manager.
Instead, there was worse to come in Monaco.
Former City defender Richard Dunne believes it will take a major rebuilding job to transform City into serious contenders for the top prizes.
"Pep realises the players have let him down and he needs to strengthen in the summer," Dunne said.
"This season has been a learning curve for him. He's probably come in and thought he can do something with them. But they are a long way short, even in terms of the Premier League they haven't got the squad."
While Guardiola will be given plenty of time to solve City's problems, it suddenly seems far from certain he will come up with the right answers.
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