Van Damme has returned to Belgium via a move to Standard Liege in a £2.5 million deal - the same fee Wolves paid when signing him from Anderlecht in the summer. The Belgian international failed to settle and McCarthy felt there was no point in retaining his services although he cannot play for Liege until January 1.
McCarthy said: "There was no point (in holding Van Damme). When someone moves, why does it always have to the case that someone has 'fallen out.'"
The former Republic of Ireland boss added: "He is a good player and sometimes it just doesn't work out. This was one of those occasions.
"He came, he started in the team, he got injured in his first game and things haven't worked out for him personally.
"He had his family life and sometimes all those little things add up to the fact that it just doesn't work out and that's what happened.
"I moved myself to play in France and, although I was blissfully happy, I came back to Millwall because I wasn't playing."
McCarthy added: "I like Jelle and, when he played, he gave his all.
"But, if he wants to go back, then even if there is one percent not totally committed to it, then why would I continue to play him when I've got lads who are totally committed?"
Source: PA
Source: PA