Sharp was controversially selected for the Games, despite not achieving the team's A standard time, after her win at the trials and silver medal at the European Championships in Helsinki.
But her inexperience at this level was exposed as she got badly boxed in a slow semi-final, trailing home seventh of eight in 2:01.78.
"I just got in a really bad position in the back straight on the second lap, there was a wall in front of me and it wasn't a clever run," she said.
"I didn't execute it properly. I am in great shape but I didn't go my way. I know I am in PB shape but it didn't happen."
Sharp claimed she ignored the debate surrounding her selection, with world medallist Jenny Meadows, British number one Marilyn Okoro and Emma Jackson all omitted in her favour.
"I have tried to ignore all the stuff surrounding my selection and just focus on my running," she said.
"I just wanted to do what I knew I could do and I am disappointed that I didn’t."