The International Rugby Board has missed a chance to grow the game globally by giving New Zealand the 2011 World Cup, say bid rivals Japan.
South Africa was eliminated in the first round of voting, with New Zealand beating Japan in the second round.
"The established nations pass the ball around their friends," said Japanese RFU chief Yoshiro Mori.
"Rugby's lost a big opportunity because of this. I don't know who voted for who but they've kept it among themselves."
He added: "I don't know why they have chosen New Zealand over Japan. The ideal of rugby has disappeared with this decision.
"Only the interests of the bigger unions remain."
International Rugby Board chief executive Mike Miller denied the decision was a retrograde step for the game.
"It wasn't looking backwards in respect that New Zealand have won the vote," he said.
"Japan have put themselves on the map by making the final two, but New Zealand can guarantee packed stadiums and that can't be guaranteed in Japan.
"This sends out a message that you don't have to be a huge country to be able to host the tournament."
New Zealand hosted and won the inaugural World Cup in 1987, and had been due to co-host the 2003 tournament with Australia until a commercial dispute saw Australia host the tournament on its own.
Japan was making its first bid to stage the event, whereas fellow beaten candidates South Africa were the hosts in 1995, when they were the winners.
After the vote, Joost van der Westhuizen and Joel Stransky, who were the half-back combination in South Africa's Cup-winning team, said they were stunned by the verdict.
"I just don't know what to say, it's come as a complete shock," said Stransky.
"I want to know why - why did the vote go against us?" added Van der Westhuizen.
And 1995 World Cup-winning captain Francois Pienaar said: "The Rugby World Cup needs big crowds in big stadia and should be played in good weather and we could provide all three.
"It is an opportunity missed but it just wasn't to be."
On a more positive note, former All Blacks captain, Sean Fitzpatrick, said: "There are four million people in New Zealand and every one of them feels they have a share of the All Blacks.
"They love their rugby union and will do everything to make sure the event is one to remember."