Yet again United were inferior to an outstanding Bilbao outfit, who scored through Fernando Llorente and Oscar de Marcos either side of the interval.
Now Sir Alex Ferguson will discover what effect a second European exit in a single season has on his team, who look to open up a four-point gap on Manchester City in the Premier League by winning at Wolves on Sunday.
Certainly, a club so proud of its European heritage has no reason to look back on this season's exploits with any fondness.
The Red Devils recorded just three wins in 10 games, and two of them came against Romanian unknowns Otelul Galati in a woeful Champions League group that contained a Basle team that conceded seven to Bayern Munich on Tuesday.
Having acknowledged how well the Basque outfit had played at Old Trafford seven days ago, Sir Alex Ferguson used the availability of Tom Cleverley to pack his midfield.
The idea was to stem Athletic's source of attacks and get support to lone striker Wayne Rooney as quickly as possible.
United did create a very early opening when Park Ji-sung sent Rooney running free.
But the 26-goal striker opted to cross instead of shoot, no-one was up in support and from that moment, United's hopes took a nosedive.
Markel Susaeta's free-kick was deflected wide after Michael Carrick had fouled Ander Herrera, then Patrice Evra headed Javi Martinez's effort off the line.
The pressure was mounting and United survived a major scare when Llorente found Iker Muniain with a superb pass.
Muniain's shot struck the base of a post with David de Gea beaten and Oscar de Marcos drove the rebound wildly over when he should have scored.
De Marcos had another shot saved before Athletic took the lead in magnificent style.
Fernando Amorebieta launched a long ball across the pitch from halfway. There appeared little danger, even as the ball dropped over Rio Ferdinand's shoulder - but Llorente met it with a first-time volley, that gave De Gea no chance as it flew into the opposite corner.
It was the least Athletic deserved after proving their Old Trafford triumph was no fluke and meant United had to score at least three times to go through, something they did not appear capable of.
Ryan Giggs' corner was easily collected by Gorka Iraizoz on a rare United foray forward.
And then, after Rooney had led a rapid counter-attack, Young was tackled by Amorebieta inside the Athletic area.
Llorente, doubtful beforehand with a hamstring strain, was replaced by Gaizka Toquero five minutes before the interval.
But it hardly seemed to matter and the glee of the home fans at half-time summed up the state of the tie.
De Marcos blasted an early shot wide at the start of the second period and clearly the hosts had no intention of easing up.
And when De Marcos and Susaeta combined to set up Andoni Iraola, the visitors almost conceded another memorable goal.
Instead of shooting, the full-back weaved his way past three defenders inside the United box. It was brilliant stuff but the Athletic skipper spoiled his hard work by flicking the ball narrowly wide.
Moments later, Iraola crossed for Toquero but, unmarked, he lifted his shot over.
Rafael was booked for deliberately handling an attempted pass by Herrera, before Chris Smalling - in a Petr Cech style helmet to protect a head wound - and Paul Pogba, on his 19th birthday, were introduced after 63 minutes for Rio Ferdinand and Michael Carrick.
It was the clearest evidence that Ferguson had given the tie up.
When De Marcos netted Athletic's second from Iraola's cross two minutes later, it was.
Pogba was booked for a late challenge on Herrera and, having elected to leave Rooney on, hearts were in mouths when he took his time getting up from a tangle with Jon Aurtenetxe.
Thankfully he got to his feet and 10 minutes from time curled home a brilliant effort of his own - but it was far too late for United.