Loew's young team began as favourites in Warsaw but lost 2-1 to a Mario Balotelli-inspired Azzurri side.
"The disappointment is great. Nobody is speaking in the dressing room. The players are crying," admitted Loew.
"I'm not going to question everything we've done. The team has great quality. It will continue to develop and learn."
Loew added: "We've had two great years.
"The team has really developed well. We won 15 games in a row but lost today against an incredibly strong Italian side, with a strong axis and two great strikers.
"There's no reason to doubt ourselves. Our team was the youngest team here.
"Even though there's disappointment today, we played a wonderful tournament and I am sure we will be able to cope with this defeat."
Germany went into Thursday's semi-final confident of reaching a final against Spain on Sunday, after winning all of their matches in the competition during their run to the last-four.
But they were 2-0 down at half-time after Balotelli struck twice, and they were then unable to break down the Italian defence until the 92nd minute, through Mesut Ozil's penalty.
Having opted to rotate his front three for last Friday's 4-2 quarter-final win over Greece, Loew again tinkered with his starting line-up, but this time it backfired as Italy had the best of the first half.
Toni Kroos was a surprise inclusion and he failed to make an impact in his first start of the competition.