Stuart Pearce's Young Lions, who were without the likes of Phil Jones, Danny Welbeck, Jack Wilshere and Alex Oxlade-Chamberlain, will not progress to the semi-finals of this year's European Championships after suffering defeats to Italy and Norway in their opening group games, meaning Tuesday's meeting with hosts Israel is a dead rubber.
And Taylor feels England's failure to reach the semi-finals of a tournament since 1996 is due to the lack of experience at junior level among such highly-rated talents. He told BBC 5 Live's Sportsweek programme: "It means we will never have players coming into the senior side who've experienced winning a tournament."
Taylor, who managed the Three Lions between 1990 and 1993, added: "We say we have the England Under-21s there but we don't have the best Under-21s there who are playing at the time.
"The chances of winning the tournament were not all that great, but I'm talking about how it's very difficult for players to get experience of a tournament at Under-21 age when they're being held out for the senior side.
"People might say the senior side is more important, but we need players who have experienced tournament football. That's where England have not produced over the years when they come to play in tournaments."
Taylor also pinpointed statistics from the recently concluded Barclays Premier League season that suggest young English players, and their more experienced colleagues, are being given less of a platform to shine than their foreign team-mates.
Champions Manchester United used 25 players in the league, 10 of whom were English, while Arsenal and Manchester City deployed five and seven Englishmen from their respective 25-man squads.
"We've all seen this coming", Taylor said. "Change was needed when the Premier League was formed in the early 1990s and you could say that the Premier League has been one of the major commercial successes of Europe. It's a fantastic league but it has been at the expense of English players.
"We get the tremendous amount of money that has now come into football and it means the top four or five clubs are looking for the best players, not in England, but in the world. I think it's something that shouldn't surprise us but it doesn't make selection for the national side easy at all, especially when you have the run of injuries that Roy's had."