Willis, the world number 772 who had already played seven matches just to make a dream second round clash on Centre Court, went down 6-0, 6-3, 6-4.
"It sounds funny but I am disappointed to lose," admitted the Englishman.
"It's daunting. I was playing alright at first, I settled into the match. I was enjoying it. If I was playing well and competing with Roger for a couple of sets I was doing well. I've earned myself a beer now."
Willis, who makes his living coaching children and senior citizens at a rowing club in the English midlands, has provided the feelgood factor of a wet, cold week in south-west London.
Just months ago Willis was considering calling time on a tennis career that appeared to be going nowhere after he squandered his early potential.
But, persuaded to give it one last shot by his new girlfriend, Willis battled through to the main draw at Wimbledon via six qualifying matches before beating world number 54 Ricardas Berankis in the first round.
Having never played a tour match before Wimbledon, the sturdily-built left-hander, dubbed 'Cartman' after a portly character from cartoon series South Park, then found himself facing a man who had won 79 matches more than him at the All England Club.
In an indication of the two different worlds they inhabit, Federer has career earnings just shy of $100 million while Willis had banked just $200 this year and still lives with his parents.
But the $63,000 he earned for his magical run will ease the burden of a player who took to the court even wearing a shirt bearing Federer's 'RG' monogram.
Willis was far from embarrassed by Federer despite shipping the first set in just 24 minutes.
From the moment he walked onto Centre Court to a deafening roar, he was in dreamland.
Roared on by his friends, who unleashed a series of adapted pop songs for his benefit, as well as his beauty queen-turned-dentist in the players box, Willis got on the scoreboard in the second game of the second set.
One particular highlight was a sublime lob over Federer for a winner he will remember for the rest of his life.
"It was all just a blur. I did enjoy myself even though I was getting duffed up," Willis said.
"I loved getting stuck in, fighting hard. The whole experience was incredible.
"I played a good point where I lobbed him. I can say I lobbed Roger Federer.
"Not my standard Wednesday that, playing Roger Federer on Centre Court. Next Wednesday might be quite different."
For Federer, who has seen virtually everything Wimbledon has to offer in his glittering career, facing a player of Willis's humble standing was a new experience and he was impressed by the underdog's performance.
"I said a few days ago, this story is gold. I believe he can make big strides," he said.
"He has a nice serve. I struggled reading it really and at the net he was very solid.
"I was thinking, This is definitely one of the matches I'll remember."
Also on Wednesday, Switzerland's Belinda Bencic put in an impressive performance against Bulgarian Tsvetana Pironkova to win 6-2, 6-3.
The 19-year-old rising star, seeded seventh at Wimbledon, finished her match on Centre Court after rain interrupted the pair's game on Court 3.