The Wolves wing wizard had been heavily tipped to earn a place in the squad for the friendly on Wednesday after his impressive displays this term.
Fabio Capello even watched him on Saturday as he lacerated the Bolton defence seemingly at will.
Jarvis was named in the provisional squad for the game but failed to make the final cut, which has left his Wolves boss not knowing whether to laugh or cry.
"I feel a little sad for him, especially with the hype beforehand after he had been named in the provisional squad," he told the club's official website.
"But they've got Stewart Downing, Ashley Young, Adam Johnson, and Theo Walcott, so he's competing against some really good players.
"Selfishly, it suits me fine. I wanted him to be in the squad for him, because he deserves the chance - he's been brilliant.
"But in view of us going to Blackpool on Saturday, it wouldn't do us any good if he played another 40, 50 or 60 minutes on Wednesday night."
McCarthy feels his Italian counterpart may well have taken a pragmatic approach to his selection process, and as a former international manager himself, it is something he understands.
Jarvis, though, he feels should console himself with the fact that he could not have done any more to claim a place amongst the best 22 players in the country.
"He couldn't have played any better for us on Saturday - he created loads, and they know who he is," he added.
"Maybe Capello thinks - and I understand if he does - that if he had to play one of the contenders in the next qualifier, it wouldn't be Matt Jarvis.
"It might be Young, Downing, Walcott or Johnson and they're in front of him.
"So he's maybe better off giving them a game to get them better versed into how he wants them and a bit more confident playing in an England shirt, than maybe someone who is not going to be involved in the next competitive international.
"That's my thinking and how I'd feel."
Source: Team Talk
Source: Team Talk