Massimo Cellino's protracted takeover may have reached its conclusion earlier on Tuesday, but their on-field problems continued as goals from Almen Abdi, Ikechi Anya and Troy Deeney settled a one-sided contest at Vicarage Road.
"It's not good," said McDermott, who revealed he had been in contact with Cellino before the game but received no assurances over his future - despite the Italian hinting that the former Reading boss would be given until the end of the season.
"Everyone's playing for their future in my opinion.
"Of course I'm under pressure - results suggest that.
"It depends who wants to be here next season because this guy's got a lot of clout and he'll have watched that tonight and been bitterly disappointed as well.
"I'm not in a strong position now because of the results we've had over a period of time.
"I met him before the game. We just talked about football, he's not looking to give me any assurances - I wouldn't expect any.
"The ownership is sorted, that's not an issue. I spoke to him before the game and he's an ambitious man; that's certainly not the sort of performance he wants to see."
Cellino officially completed his takeover at Elland Road earlier on Tuesday, with the Italian businessman's lawyers confirming the news which should at least stave off the threat of administration.
He is still hoping the Football League will ratify his takeover - which was initially rejected after the Italian was convicted of avoiding tax payments on a luxury yacht - at a board meeting on Thursday after winning his appeal against its decision.
Watford might have been in front as early as the fourth minute, when Abdi broke down the right and picked out Davide Faraoni, who saw his shot from 12 yards well blocked.
Five minutes later the Hornets opened the scoring - Anya beating Scott Wootton down left flank and picking out Abdi, who timed his run into box perfectly to thump a header past Jack Butland from six yards for his first goal of the season.
It said much about Leeds first-half impotence that their only meaningful effort came when Ross McCormack tried his luck from near the halfway line and Manuel Almunia comfortably held his speculative effort.
Anya doubled Watford's advantage in the 32nd minute after Albert Riera progressed to the byline on the left flank and cut the ball back for Sean Murray, who fed Faraoni to stand up a cross which the Scotland winger headed home from six yards.
The game was put beyond doubt in the 66th minute when hesitant defending from Tom Lees and Wootton allowed Deeney to wriggle into the box and score his 21st league goal of the season.
Cellino has talked about restoring Leeds to the Premier League within two years, but McDermott admitted that seemed a long way off after such an abject display.
"We're letting each other down - the fans travelled all that way," he added.
"We have to get the details right and we're not doing that.
"I think that's definitely doable. It's difficult to see that after what we've just witnessed tonight.
"There's a big job here. It's a big club and there's a lot to be done, but I think he's got the clout to do it.
"I want to be here - it really is hurting at the moment but I've done it before and I know I can do it again."
Victory keeps Watford's slim play-off hopes alive, with Beppe Sannino's side seven points off sixth place but with a game in hand, but the Italian refused to be drawn on the prospect of promotion.
"I don't like to speak about the play-offs," he said.
"I like to speak about the next match.
"It was a good win and now we have six matches to play.
"We hope to collect as many points as possible."