Recent victories over Tottenham and Manchester City had suggested United had started to turn a corner under Solskjaer, but a home draw to Everton was followed by this dismal display in Hertfordshire, and the Norwegian was far from impressed.
A David De Gea howler allowed Ismaila Sarr to open the scoring before Troy Deeney's penalty four minutes later secured a 2-0 victory and a first home win of the season for the Hornets.
United were poor for much of the contest but improved slightly following the introduction of Paul Pogba, who came off the bench to make his first appearance since September following an ankle injury.
The Red Devils have struggled against teams in the bottom half of the table this season and have won just one of the last 17 games in which they have enjoyed a larger portion of possession.
Solskjaer's side will sit eighth in the table on Christmas Day as hopes of a top-four finish continue to dwindle, and the Norwegian pulled no punches in assessing United's performance at Vicarage Road.
"The first half it could easily have been my testimonial," he said. "And it might have been a better atmosphere at my testimonial, to be fair. It was very subdued, slow, no tempo, urgency."
The Reds will no doubt come in for some heavy criticism for the last two results, and performances like the ones they put in against Spurs and City are needed on a consistent basis if they are to get back to the United of old.
The defeat at Watford is a huge setback and will once again set one or two alarm bells ringing.
United now entertain Newcastle on Boxing Day and a positive result is needed or the knives will really be out once again.