WATCH: Chris Wilder's reaction as Sheffield United's play-off hopes take huge blow with defeat at Birmingham
Mark Duffy put the Blades ahead in the eighth minute against his old club, but Marc Roberts equalised just after the half-hour mark and Jacques Maghoma netted the winner with just over 20 minutes remaining.
United still only trail sixth-placed Millwall by three points but Derby, Brentford, Preston and Bristol City are all above them in the table, and Wilder said: "The only bright part of the game for me was the start.
"We just didn't play good enough individually all over the pitch. We lost too many balls and made some really poor decisions.
"When we have done well we have played as a group. On this occasion there were too many players who had a poor game.
"When that happens you know you are not going to get a result. We didn't deserve to win as Birmingham did enough to take the points and that is all that matters.
"We had a great opportunity to achieve something this season. But we have not come up with big enough moments when we were doing well. That is the difference between us the teams who are in the play-offs."