"There are other people outside this who need to have a look at themselves and why those decisions were made and you have got to feel sorry for the people involved and who this has affected."
England's 33-13 loss to Australia completed their worst ever World Cup performance.
"Australia have done us a massive favour but I felt with 15-20 minutes to go, it was like sitting in the (coaches') box myself because you are going through the emotions of what the coaches are doing," Gatland said.
"I turned around and said to my wife that what happens in the next 20 minutes changes people's lives, whether it is ours or people involved with England. You have got to put things into perspective.
"It's great that we have qualified but you have got to feel for other people involved in other teams because there is a huge amount at stake. It's families and livelihoods and all that sort of stuff."
English reporters asked if Gatland had any sympathy for Lancaster and he replied: "Absolutely. For what he has done when he took over the job, in terms of the discipline he has instilled in that side and how his players conduct themselves, I have a huge amount of respect for what he has done.
"If Stuart does get an opportunity to continue, this is potentially a massive moment for him as a coach and he will look back on the experiences of the World Cup and the Six Nations, where he has been so close. Those experiences will make him a better coach and you learn from defeats and failures rather than the successes.
"There were a couple of moments of brilliance from Australia. They are always capable of doing that. The sin-binning (of England's fly-half Owen Farrell) was a huge point in the game. When England came back and started to move the ball, they put Australia under some pressure. At 20-13, the game was in the balance."
But the successful British Lions coach stopped short of saying Lancaster should continue as England head coach.
"That's not my decision," he said of the thorny question currently dividing English rugby.
Wales have lost their last 10 Tests against the Wallabies and will be aiming to win the "pool of death" to avoid a quarter final against two-time Cup winners South Africa and creating a knockout match-up against either Scotland or Japan.