With the South Stand packed with local junior sides and employees from the club's principal partner MBNA, the Blues attracted their fifth biggest crowd of the campaign for the BT Sport live clash.
And it looked as if they were going to bounce back from their defeats to high-flying Dover Athletic and Dagenham & Redbridge when Blaine Hudson fired them into a 31st-minute lead.
But, hamstrung by the loss of Theo Vassell, Chester lost their way and play-off pushing Gateshead ran out thoroughly deserved winners thanks to strikes either side of half-time from Danny Johnson and Jordan Burrow.
McCarthy had no complaints, admitting the Blues lacked zip and that they should have done better with both of the goals they conceded.
And, responding to the accusation his side looked a 'shapeless mess' in a forgettable second half when, James Alabi aside, they rarely threatened, the Chester boss took full responsibility for the loss.
What did Jon McCarthy say?
"It was a good start from us, it felt like we picked up from the performances against Dover and especially Dagenham, and we got the goal to go 1-0 up.
"Theo Vasselll was important for us tactically, we put him in there (at left-back) to deal with (James) Bolton, their number two, and actually he was our attacking strength in the opening part of the game, so to lose him did affect things, and I think that was the point they started to take control of the game.
"We're going to be very disappointed with the goals, and that's been a feature over recent weeks, but it just feels like a flatness. We had the TV here, the MBNA day, and all the kids, and that's my frustration and disappointment. My players have been so good for me all season but we didn't provide that on what was a little bit of an occasion. It's very hard to take but I'll go and watch it and find a way for us to find some form.
"I'll try and defend somewhat the 'shapeless mess'. We pick up an injury and it caused us a problem, and then I had to find a way to get back into the game when we conceded. It was tactically to say to (Elliott) Durrell, 'come and pull high and wide right', and to say to Kane Richards, 'go and stay high wide left', so if their wide centre-halves come and mark those players, we're one-on-one.
"But actually what I really needed to happen was for their wing-backs to say, 'I can't do that', and pull back and it gives us some room in midfield.
"But actually what does happen is Durrell and Kane just want to go after the ball, so it ends up with three of them going really narrow, so I spend a lot of time saying, 'stay wide'.
"Then I have Tom Shaw wanting to go on, so I have him high, Wade Joyce sat behind, and Luke George in the middle, so I'm trying to say, 'those three need to be flat, and be defensive, and not be pushing on'.
"That's the message, and I take full responsibility if I wasn't able to get that across and it looked shapeless. It was trying to respond to a good team, a well-organised team, and it was to try and give our fans something and give my players a way to get back into the game. I most definitely failed on this occasion.
"Their players played better than us. They didn't work harder or want it more than us - they played better than us. It's another hard lesson for us to take but it's one we have to learn from.
"We lacked a little bit of spark that has to happen with our team. It didn't materialise from any real source, although there a bit from Alabi, who I thought was strong again, but it was frustrating.
"People will forget the first 20-25 minutes. We could have been two goals to the good and that would completely change things.
"We're disappointed we've hit three strong teams and we've got nothing. I can't make any excuses but there were signs in all of those games that we could have got something. At some point I need to change those margins. It's not massive gaps, it's not huge, wide chasms. But there still is some difference."