Crystal Palace boss Dougie Freedman felt his side let tension get the better of them, while Alan Knill hailed a vital victory for Scunthorpe.
The Iron closed the gap on the Eagles to just three points in their battle to escape the bottom three as the form book was ripped up at Selhurst Park.
Palace went into the game on a 13-game unbeaten run at home while the visitors were out to avoid a club record 10th straight defeat on the road.
David Mirfin and Ramon Nunez found the net for the visitors with Sean Scannell pulling one back for Palace, before seeing red along with Joe Garner as tempers began to fray in the closing stages.
"It was a really bad day at the office," said Freedman. "We've been on a great run at home but it's come to an end just when we didn't want it to.
"We were maybe a bit tense and Scunthorpe were two or three yards sharper than our players. I've no complaints about losing the match.
"But we will take our medicine and move on. What I have to ask now is how will we respond?"
Freedman's misery was compounded by an injury to on-loan Everton striker James Vaughan, who needs a scan on his ankle and could miss the run-in.
Iron boss Knill believes his side now have a fighting chance of survival with four games remaining.
"It's a massive win," he admitted.
"It was billed as a must-win game and it really was.
"If they had gone nine points in front it would have been difficult with four games left. We've cut it to three and it gives us a belief that we can still do it.
"We are always on at them that they are better than they have shown.
"From start to finish it was a really good performance by the team."