The Reds led through Tom Lawrence's well-worked opener but the Welshman and James Wilson were unable to complete the 90 minutes in a team already missing Joe Rothwell's drive in midfield. Despite the injuries, Joyce's side still made a brave bid to retain the nationwide title.
Charly Musonda and Lewis Baker netted for the Blues, who had topped the Barclays Under-21 division and showed their power throughout in front of a crowd in excess of 13,000.
"Obviously there's a great deal of disappointment for the boys and I feel sorry for them," Joyce explained to MUTV. "They've put a lot of effort in this year and have been up to the challenges but just fell short at the death.
"I thought we started really brightly, played some good football and were good value for the goal. But we've gone into the game with two or three knocks and bangs and I think, by half-time, there were probably a few lads with knocks who were really off the pace. We carried them a bit in the second half. They [Lawrence and Wilson] have not trained much since the first-team games and we knew that but we've not had many attacking options all season. It certainly made a difference in the second half."
Lessons will be learned from the defeat and there was still much to admire from a youthful group, who rallied after Christmas when obtaining a regular run of games.