"You don't do this to people," added Moore. "You don't treat your top man like this. It beggars belief really.
"How can they offer him another job? What could be of equal rank to the head coach?
"You go from being the top man to being coach of the Academy - I don't think so."
Moore believes RFU chief executive Francis Baron should resign over the manner of Ashton's dismissal.
"Francis Baron ought to go - it is an absolute disgrace," Moore told BBC Radio 5 Live. "He should go or resign."
Ashton, 61, who rejoined the England set-up in May 2006 as attack coach, succeeded Andy Robinson as head coach in late December 2006.
After finishing third with three wins out of five in the 2007 Six nations, Ashton guided England to the World Cup final - where they lost 15-6 to South Africa - in Paris last year against the odds.
This year's Six Nations saw disappointing losses to Wales and Scotland, although England's second-place finish was their best since 2003.
Ashton is a victim of a power struggle in the management board of the RFU between the paid employees and the amateurs
Moore, though, insists Ashton has not been given the time to make England a world force once more.
He said: "Ashton's had less than two years to try and turn the ship around - Clive Woodward had six so we are getting into short-termism again.
"It's immensely frustrating - it's not the sort of thing we need. The rest of the Premiership is doing well, the standards are improving and this is a public relations disaster."
Moore blamed the situation on divisions within the RFU, but suggested Ashton paid the price for not being ruthless enough.
"I think he's been too nice," added Moore.
"He stepped into a position when the RFU sacked the last coach Andy Robinson. They couldn't find anyone of note because it was seven months before a World Cup. He did them a favour.
"He's taking the rap for the players. He is also a victim of a power struggle in the management board of the RFU between the paid employees and the amateurs - some want Johnson firmly and some of them want Ashton. He has fallen foul of that.
"It is simply not good enough for the RFU to open itself up to ridicule like this.
"What message does it say to anyone who wants to be an employee with them on any contract? We are quite prepared to treat you shamelessly, illegally, badly and in full view of the public."
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