The Red Devils, who have lost all 19 matches with the Warriors at the DW Stadium, had fought their way back from 16-2 down to draw level thanks to three tries in a 17-minute spell from Junior Sa'u, Josh Griffin and Ben Murdoch-Masila only to concede four minutes from the end to go down 20-16.
However, referee George Stokes and his touch judges failed to spot a knock-on by Wigan forward Taulima Tautai in the build-up to the match-winning try by winger Dom Manfredi.
"I'm really disappointed with the way it ended because i t looked like we should have had a share of the points," Watson said.
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"The fact he knocked on at the last play-the-ball before the score doesn't help and the fact that we could see it in the stand and the referee and his officials can't is a big disappointment."
Salford had taken an early lead with a penalty goal from Gareth O'Brien but two tries from winger Oliver Gildart put Wigan into a 10-6 interval lead and the game looked to be over when centre Anthony Gelling went over three minutes into the second half.
"We gave them too much respect in the first half and you can't do that to teams like Wigan," Watson said. "You can't feel them out, you've got to attack them from the off.
"But in the second half, you saw what we could do when we have the right mind-set. The guys realised at half-time that we hadn't played well but we were still in the game.
"We just didn't have enough to come through the other side. It was bitter-sweet, we felt we had them on the ropes but we didn't have enough to finish them off. Good teams like Wigan find a way to win and we've still got to progress to that stage."
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