World Cup winner Valentine Holmes – moved from fullback after a poor outing in the round one loss to the Cowboys – backed it up with another forgettable match while his replacement Josh Dugan was mostly strong. Flanagan said Holmes will continue on the wing, for now.
Cronulla had raced out to a 14-0 lead and completed their first 20 sets but fell to pieces after half-time as the Dragons finally got the use of a strong breeze.
A 10-minute period in which Dragons winger Jason Nightingale was sin-binned in the second half proved critical as the Sharks barely completed a set and were penalised several times to hand their opponents a chance to close out the match.
"It was really disappointing – one error in the first half then we got 10 out in the second half," Flanagan said.
"They'd probably be disappointed with their first half and we're terribly disappointed with our second. You just can't do it.
"Some of the errors we made today in that second half were fundamental. Kicking out on the full, not catching kick-offs and so on. I'm really disappointed. We showed the way we can play in the first half.
"That's going back to last week again, we didn't catch a kick off against the Cowboys after we scored, and to go to 16-16 today and not catch the kick-off then kick out on the full from another kick-off.
There were some real poor errors. Coming off our try-line, we dropped the ball on tackle one or two too many times. I lost count."
Flanagan said the Dragons did a much better job of managing the game in the period they went down to 12 men.
"They kicked two penalty goals [in that 10-minute period] and we didn't deserve to win in the end. Too many errors and they controlled that game in a really important block when they were down to 12," he said.
Skipper Paul Gallen said the team had been their own worst enemies.
"[We've got] no-one to blame but ourselves as Flanno said. It's everyone, we spoke about it inside, it's everyone across the board. Penalties, errors, beating ourselves," he said.
Asked about Holmes' performance in particular, Flanagan said both he and Dugan had things to work on but that Holmes would continue as a winger for now.
Flanagan bristled at the suggestion Holmes – who has repeatedly stated a public desire to play fullback – was unhappy on the wing.
"[Holmes] is the world's best winger, I heard. Someone told me, someone in the media. He played for Australia, one of the world's best wingers," Flanagan said.
"We can bang on about Valentine playing on the wing, his best position for us at the moment is on the wing. That's where he'll play.
Whether he's played well tonight, you (the media) have got to make that call. I'll talk to him about his game, he had some errors in it and as I said he's an Australian winger and we just need to pick it up. Not just him, everyone."