A candid Smith insisted that his team were second best in a first half that saw Wolves take a slender lead though Ruben Neves. Without pressure on the Portuguese midfielder, he was able to guide the ball past Orjan Nyland from a corner routine.
An injury stricken Villa weren't helped by further blows to Jed Steer and Matt Targett. They, alongside Jack Grealish, Tom Heaton and Bjorn Engels will battle back from respective injuries in the international break.
Smith told Birmingham Live: "Tom Heaton's been struggling with a calf so I knew he was going to pull out of the game. Jack was always 50/50. Bjorn (hip) came to see me yesterday morning so I always knew we were struggling with that.
"What the international period will do will enable them to be fit for the Newcastle game. I'm not too sure about Jed Steer, I'll wait for the prognosis on his Achilles injury. Making the two substitutions in the first half stopped me doing three at half time!"
A gutless display from Villa brought out the anger in Smith. He suggested the media 'wouldn't be able to print' what he said in the away dressing room.
The Villa boss said: "The game seemed bigger to them than it was to us. We were poor and they got a reminder at half-time that they must win their duels and compete.
"You can’t give any team a 45 minute head start and all I took from the first half was we were only 1-0 down. In the second half we got a better performance but it didn’t take much to achieve that."
Since Smith took control at Villa Park over a year ago, he has a 47% win record, but admitted losing at Molineux was one of his worst in that time.
A bad afternoon
"That’s as bad a first 45 minutes I’ve had since we lost 3-0 at Wigan away last year. We were very poor, we just didn’t start.
"We didn’t cope with the pressure we were put under. They were right up for it from the start and we didn’t have enough intensity in our play. That’s something we’ll talk about."
Despite missing key first team regualrs, Smith berated his sides' application throughout the first visit to Molineux in the Premier League for seven years.
“It still doesn't affect your desire to go and win a header, a tackle, a second ball and just help your teammates out and I didn't think we did that first half.
"We’ve got to go and compete, it doesn’t matter what game you’re playing.
"People aren't just going to let you pass the ball and I thought they put us under pressure and we didn't cope with the pressure they put us under today in the first 45 minutes. You can't give anyone a 45-minute head start, especially in the Premier League."
Villa will welcome back old boss Steve Bruce and his Newcastle side to Villa Park for 'Monday Night Football' after the international break.