Three points for the Pilgrims at Bootham Crescent on Easter Monday would have virtually assured their survival but the 2-0 defeat leaves them just a point above the League Two relegation zone.
"It was not good enough at all," he said. "It was a very poor performance, we didn't deserve anything from the game.
"I don't think we were up for it - there's no reason why we shouldn't have been especially after the derby game (against Exeter on Saturday) and winning three games on the spin. We played like a team who've already been relegated, and I can't explain why."
Sheridan acknowledged the magnitude of the defeat which not only dragged them back into deep trouble but also lifted one of their rivals, who are now just one point behind Argyle.
He added: "I don't mind losing football matches but it's the way we lost it.
"We are playing against a team we could have got away from a little bit (in the table) but York wanted it more than us and I hold my hands up. I'm disappointed."