First-half goals by striker Mario Gomez put the Germans in control before Holland forward Robin van Persie pulled a consolation back for the Dutch with 15 minutes left in the Group B clash.
Holland's back-four of Ajax's Gregory van der Wiel, Everton's John Heitinga, Malaga's Joris Mathijsen and Eindhoven's Jetro Willems failed to cope with Gomez's presence as the Bayern Munich star now has three goals at Euro 2012.
Having suffered a shock 1-0 defeat to Denmark last Saturday, Van Marwijk's World Cup finalists now have to beat Portugal in Kharkiv on Sunday, while hoping Germany beat Denmark, to avoid an early exit from Group B.
After boosting his attack at half-time by introducing Tottenham Hotspur midfielder Rafael van der Vaart and Schalke striker Klaas-Jan Huntelaar, Van Marwijk said it was his defenders who had let him down.
"We are disappointed we lost, we started well in the first 20 minutes we had a few good chances, then the first goal for Germany came from nothing," said the 60-year-old Van Marwijk, who steered Holland to the 2010 World Cup final.
"We gave them too much space and we didn't show enough courage today, especially in defence.
"We kept believing in ourselves and kept fighting, it is unfortunate it went this way.
"Germany had a few problems, particularly after the goal from Van Persie.
"We were more courageous going forward, but we weren't strong enough or courageous enough in defence."
Van Marwijk said the Dutch now owe it to their legion of travelling fans to down Cristiano Ronaldo-led Portugal and give themselves a chance of reaching the last eight on Sunday.
"We still have a chance to go through and we have to believe in it," he said defiantly.
"Thousands of fans have come here and we have to do well for them, we have to beat Portugal now to have a chance."
Having also lost to Germany in Hamburg last November when Joachim Loew's side inflicted a 3-0 win on the Dutch, Van Marwijk said the Germans have justified their status amongst the favourites.
"Germany has a very good team, it has been a while since they have had so many good players," said the Dutch boss.
"They have creativity and score as they please, they are definitely favourites and deserve to be so."