Former England captain Carling also questioned whether manager Martin Johnson would want to remain in his job and called for sweeping reform at the Rugby Football Union.
England exited the tournament 10 days ago, but Carling remains furious about a campaign when Johnson's squad at times became a laughing stock.
Their stay in New Zealand was overshadowed by players' raucous behaviour at a bar in Queenstown, before three players - Chris Ashton, James Haskell and Dylan Hartley - were forced to apologise to a female hotel worker in Dunedin for lecherous comments.
Centre Manu Tuilagi was then fined £3,000 by the RFU for diving off a ferry into Auckland Harbour as England's wretched stay in New Zealand drew to a close.
On the field, England performed with little ambition or adventure, grinding out narrow victories over Argentina and Scotland before exiting the competition against a limited French side.
It not only raised questions about Johnson's future, but those of his coaching staff, while several England stars could easily have played their last games for their country.
"I don't understand it," Carling said.
"I just think the values system seems to have been lost in the England team, and I am not sure where it has gone.
"I hope whoever forms the new coaching team sits back down with these players and some of the players grow up a wee bit and understand the honour of putting on that shirt.
"A lot of them, the way they behaved down here was an insult to the shirt.
"I am not being funny, but to blame the media is an easy excuse.
"There is part of the media that love that (type of story), but there is a naivety to actually give them (the papers) a chance to start going down that line.
"I didn't see what was wrong with guys going to a bar and having some beers. I don't have an issue with that at all, and I don't think anyone ever would.
"Some of the other stuff, it was naive and it was stupid, but the day rugby players cannot go out in public to a bar and have a beer, that's a very sad day.
"The rest of it was naive and irresponsible, and you can't defend it. The majority of the guys didn't get involved in anything stupid, but all it takes is four or five of them."
Carling, speaking in Auckland in his capacity as a Heineken World Cup ambassador, believes Tuilagi's ferry leap was a particularly crass action.
"Jumping into the harbour at the end of a World Cup is just stupid," he added.
"If you are here on a tour or on holiday, then fine, if that's what you want to do. At the end of a World Cup campaign that hasn't been successful, that has been blighted by poor media (for the squad), you just think 'Jesus'.
"Of course they let Martin Johnson down, they let fellow players down, fans, the whole thing."
Johnson is thought to be considering his future, and Carling, who captained England 59 times during his 72-cap career, said: "I don't know if Johnno will put himself up again, whether he will actually even put his name in the hat.
"I personally think that even he would be hard-pushed to say the coaching team should stay.
"He's a very loyal man and if he is told the coaching team needs to change, would he still hang around? I don't know.
"I also think Johnno is all about winning. He was an incredible player, he was an incredible captain, and if you sit down and assess the last three and a half years, has it been good enough?
"Have England progressed far enough? Personally, I don't think they have."
Carling caused controversy in 1995 when he famously labelled RFU committee members as "57 old farts".
He was sacked as captain, but huge public pressure and a public apology by him led to him being reinstated in time for the World Cup that year.
Sixteen years on, Carling said: "At the moment, people talk about the players, but there has been enough going on with the RFU themselves, with vacant positions and votes of no confidence.
"The whole culture of the organisation needs to be reassessed, changed and sorted out. It starts at the very top.
"They have got to sit down and think 'am I doing this for the best of English rugby, or am I doing this for my own ego and little power base?'
"If it is for ego and power base, then move on."
* For more insights and analysis from the Heineken ambassadors into Rugby World Cup 2011 in New Zealand, please visit www.thisisthegame.com.
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