The British player and world number two was devastated following his 3-1 defeat to Germany's Jochen Wollmert at the ExCel.
He fell to the ground with head in hands having lost the final point and had to be consoled by coach Gorazd Vecko.
Wollmert who upset the Chinese world number one in the semi-finals, hugged Bayley and raised his hand in salute to the crowd.
But that - and the fact he'd won Britain's first silver in the sport since Neil Robinson
in 1996 - was little consolation.
“I've trained six hours a day for the last six years for this moment,” said Bayley.
“I'm sorry I let everyone down and sorry to my coach because I don’t think I played as well as I could.
“But to get something from the Games is brilliant. It's a medal towards the team tally and it's a table tennis one, which we don't usually get.
“I was confident going in to the match because I had beaten him the last nine times out of ten but he played tactically so well
“I think I was too pumped up and maybe I wanted it a bit too much. The atmosphere was amazing – I’ve never experienced that before – and maybe I just went after it a bit too much. He was very cool and calm and he has a lot of experience.”
Bayley, who started playing the sport aged seven, when his grandmother bought him a table while he was recovering from cancer, believes he can improve on silver at the next Paralympics in four years time.
“I've got to be a gracious loser and hopefully continue and try and beat him in Rio,” he added.
“I’m still young, I still want to improve and I still want to get a gold medal at the Paralympic Games – that’s my dream.”
Paul Davies then defied his world ranking to claim table tennis bronze at the Paralympics.
The 45-year old followed Bayley to win the hosts' second medal in the sport, defeating Lee Chang Ho of Korea, ranked fourth in the world.
“I've been playing for 21 years, since the day my son was born, and now I’m a Paralympic bronze medallist,” said Davies.
“I hope I’ve inspired the younger generation who have got disabilities.
"There is sport out there for every disability and if they pick the right one and work hard enough maybe they will be sitting where I am in Rio in four years’ time.
“I don’t know what’s going on with me lately, it always seems to be going to a fifth set.
He is an awesome player and better than me but I treated this bronze medal match as my final."
However, there was disappointment for two other British players in bronze medal matches, Sara Head was beaten by veteran Slovakian Alena Kanova and teenager Ross Wilson went out to Swedish world number two Emil Andersson.