Goals from Filip Djordjevic, Aleksandar Kolarov and Lazar Markovic put the game well beyond the Dragons and not even the appearance of Gareth Bale could save them from slipping to defeat.
Scotland's win in Macedonia sent Wales plunging to the bottom of the section on goal difference, and they were booed off at full-time.
"We were just outclassed," Coleman admitted to Sky Sports. "Even if we were at our strongest, we're going in against a team like that where they're a good team. There is not a weakness in their play. They're strong and aggressive and even with the ball our game plan was just to try and stay in the game.
"We couldn't overlap like we normally do because we were not at our strongest going into the game.
"We just tried to stay in the game and the goals we conceded were not good goals at all.
"At 2-0 down at half-time it's always going to be difficult to get one back, so we always had that in mind with 30 minutes to go that Gareth (Bale) would come on. That's what he's got and he tired quickly when he did come on, but we wanted to get him on the pitch and then we concede a third goal."
Meanwhile, man of the match Kolarov was pleased with the victory and now wants Serbia to finish as strongly as possible in the final few matches of the group, knowing that they are unable to qualify for next summer's World Cup finals.
"We knew that it was going to be a really difficult game, but the two goals helped us and that made it easier for us in the second half," said the Manchester City defender.
"We hope that we're going to win our next game against Macedonia and finish qualification in the best way."
Kolarov, who scored the second goal of the night thanks to a stunning 30-yard strike, added: "We've had a couple of poor results at home so we knew that we are having a difficult moment because we have a very young team, so we hope the qualification campaign for the next European Championship (in 2016) will be much better."