FIFA suspended Suarez from all football-related activity until the end of October after he bit Giorgio Chiellini during Uruguay's final group game against Italy on Tuesday.
Suarez sat out Saturday's second-round match against Colombia and Uruguay suffered without him, falling to a 2-0 defeat thanks to a brace from James Rodriguez.
After the match, Lugano lashed out at FIFA for imposing the record ban on Suarez.
"It's a breach of human rights that a player cannot go into a stadium where there are 80,000 people or into a hotel with his team-mates, that he cannot work for four months," the defender said.
"He has committed a crime, but this (ban) is barbarity.
"Not even a criminal would receive this penalty."
Uruguay were weak up front without Suarez in the Maracana, where Rodriguez scored two stunning goals for Colombia.
Diego Forlan, 35, played poorly and Edinson Cavani did not have the same impact as he did against England when he played alongside Suarez.
Lugano thinks Uruguay were always going to find it hard to make the quarter-finals without their star man.
"He is irreplaceable," the former West Brom defender said of Suarez. "Against Colombia we weren't able to replace the skills he has.
"For years he has been our best player.
"Us losing him is much worse even than Brazil losing Neymar or Argentina losing (Lionel) Messi."
Cavani insisted the Suarez saga had not proved to be too much of a distraction in the build-up to the game, though.
"From the moment we knew about the sanction, we only thought about Colombia," the Paris St Germain striker said.
"We knew it was a tough penalty, both for him and for us, but from that moment we separated ourselves from it and we concentrated on our players."
Forlan, meanwhile, said Colombia deserved to go through to their quarter-final match against Brazil.
"They are a good team with good players," he said. "They all played well."
When asked whether that was his last game for Uruguay, the former Manchester United striker said: "I don't know."