I don't think that England played badly, it's just that they are toothless.

England retained 62% of the possession and completed 75% of their passes as compared with Uruguay's 55% of completed passes.
Where Uruguay won this match was by having a compact central defence and when they back pedalled, the central midfield also plugged their central area. This meant that when England did get into the last third, they were out manned.

Both of Uruguay's goals came from play which got in behind an open England back four which played flat across the pitch and was sluggish in getting back to defend. Gerrard's flick to Suarez was more of his effort (badly) to cover for a back four which failed in their basic job.

Technically it's not really that hard to diagnose but then again, being an armchair pundit from the other side of the world, I have a far easier job than the XI on the pitch.