"We (the German national team) went out of the World Cup early, were relegated in the League of Nations and the Champions League has ended for all German sides in the round of 16," the former Germany captain told Sky.
"It's a clue we're not doing everything right, we must not try to explain that away with excuses."
For the first time since 2006, there will be no German club in the quarter-finals and for the first time since 2011, Bayern have failed to advance past the Champions League's last 16.
"A perfect Dexit" commented broadcaster RTL.
The combination of Deutschland and exit sums up the national mood after Bayern -- the last German hope in the Champions League -- bowed out with a 3-1 defeat to Liverpool.
A hard truth for a proud footballing nation is that in three last-16 matches between Premier League and Bundesliga clubs, English teams won every one.
Bayern's 3-1 loss to Liverpool over two-legs, Dortmund's 4-0 defeat to Tottenham and Schalke's 10-2 mauling against Manchester City, including a 7-0 away thrashing at the Etihad on Tuesday, handed English teams a 17-3 aggregate victory over six games.
Liverpool's German manager Jurgen Klopp however rejected the notion that Premier League clubs are superior to Bundesliga sides after the Reds' convincing win in Munich on Wednesday.
"Not all teams are better in the Premier League than in the Bundesliga," said Klopp.
"But there are six, seven teams that would play in every league in the world, so that makes it a bit special."
Klopp insisted that Schalke's 7-0 hammering by City "is not a barometer", that Dortmund had chances against Spurs despite their clear defeat, and that Bayern "could have gone through" after earning a goalless first leg at Anfield.
"We are not better than Bayern, we are just difficult to play," he said.
Despite Klopp's generous appraisal, Bayern's exit follows a declining trend, first signalled in 2017 when, for the first time since 2004-05, no German sides made the Champions League or Europa League semi-finals.
Germany's top-selling newspaper Bild, like Ballack, linked Bayern's early exit in the knock-out stages to the national team's crash from first to 16th in the FIFA rankings over the last 12 months.
"The fact is: German football is second rate internationally, 2020 must be better," the tabloid said.
"As a reminder, in 2013 Bayern won the Champions League and in 2014, we became world champions.
"In 2018, Germany flies out of the World Cup for the first time in the group stages and in 2019, there is no German club in the Champions League quarter-finals."
The comment by Bayern chairman Karl-Heinz Rummenigge that "money does not score goals" has stirred debate in Germany.
Debate rages over the "50+1" rule, which prevents a wealthy investor taking over a German club, making it impossible for Bundesliga sides to recruit big-money foreign backers.
Germany's Under-17 and Under-19 teams no longer shine in international youth tournaments.
'Hard to find top talent'
The trend of young talented English players, starved of first-team football in the Premier League, being recruited by German clubs also hints at declining standards in Bundesliga academies.
Dortmund's director of sport Michael Zorc feels English clubs have stolen a march.
"There was a time when English clubs were eager to recruit German players, but today we feel that the training and development of young players in English academies is pretty good," Zorc said last month.
Zorc says German clubs still want to nurture future Bundesliga stars, "but when it gets to absolutely top talents, it's more and more difficult to find them in Germany".
No doubt, the argument will again crop up that Bayern's domination of the Bundesliga does not prepare them for high-pressure Champions League games.
As Queen's "The Show Must Go On" echoed around the Allianz Arena, head coach Niko Kovac glumly admitted Bayern must now be content with trying to win a seventh straight Bundesliga title, yet only Dortmund offer any resistance in the title race.