Gatland had already seen prop Adam Jones depart the World Cup semi-final with a calf injury, and then eight minutes later Wales captain Sam Warburton was sent off by Irish referee Alain Rolland.
Despite being reduced to 14 men for more than an hour, Wales scored the game's only try through scrum-half Mike Phillips and only lost by a point, 9-8.
Gatland, still disappointed by the referee's decision, revealed that in the wake of the red card the coaches talked about faking an injury.
"I know a lot has been spoken about the red card," Gatland said.
"In retrospect, I can understand in any game under the letter of the law there are a number of decisions referees can make.
"I just thought on that occasion, given the significance of a World Cup semi-final, to give a yellow card would have been an appropriate decision.
"That is why they are appointed as the top referees in the world, because they make the right decisions."
Gatland continued: "I will give you an example with what happened after that. We'd already lost Adam Jones, and we discussed in the (coaches) box whether we would fake an injury to one of our props and go to uncontested scrums.
"But morally, I made the decision it wasn't the right thing to do.
"We could easily have done that in the first 25-30 minutes, but in the spirit of the game, in the spirit of a World Cup semi-final, I didn't think that was the fairest or the right thing.
"That is why I honestly believe Alain Rolland made the wrong decision. Under the rules and regulations he was perfectly entitled to give a red card. But every game is different.
"You have to take the circumstances of the situation and the intent, and in that situation, given his experience and the role he was given, a yellow card was the right decision to make."
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