The 22-year-old from County Cork – newly signed to Team Sky after the demise of his Aqua Blue Sport team last month – had the full support of the Irish squad in a bid to come away with the rainbow jersey, but ultimately had to watch better riders on the day disappear up the road.
The race was won by Switzerland's Marc Hirschi after an audacious attack on the downhill section of the final lap.
The Irish team had been active all race, with the emerald green ever-present at the head of the race to keep the pace high and ensure that the early break of three riders was never given too much leeway.
"I think the Irish lads deserve massive credit because they rode superbly today and I've never seen that," Dunbar told RTÉ. "I've never seen any Irish team take control of a race like they did today, in a World Championship even, and they deserve a lot of credit for that.
"We rode to win the race today. I went in with the intention of winning and I would have been happy with nothing else.
"The third time up the climb when they went full gas, I just realised that, 'Right – if the race comes down to the climb, it's not going to be my day today,'" the former Irish junior road race and U23 time trial champion said.
Dunbar had nevertheless looked strong when he attempted to bridge to what had become a two-man breakaway on the second to last lap, only for the race to come back together on the final lap, when eventual winner Hirschi, and Belgium's Bjorg Lambrecht and Finland's Jaakko Hanninen, rode clear for the medals.
"We had a meeting last night [Thursday]. We knew we could win the race, and we gave ourselves the best possible chance of doing that," said Dunbar.
"When push came to shove today, I probably did let everyone down here, but, as I said, it just wasn't my day, and my legs just didn't show up.
"I was there mentally today, but my legs weren't," he continued. "And that's disappointing because I had good form last week. I thought my prep coming into this and everything I've done... I don't think I could have actually done it better."