In what was a truly remarkable game of football, the Premier League champions were humbled by Villa, with Ollie Watkins and Jack Grealish putting in magical performances against the completely inept Reds' defence.
Watkins bagged a hat-trick, while Grealish scored two to add to his hat-trick of assists.
Nearly every time Villa ventured forward they looked like they could score, and Klopp reckons his players capitulated mentally as the game played out, while lamenting the history that was created with the result.
"It looked like we lost the plot after it went to 1-0," Klopp told BBC Sport.
"Who wants to lose 7-2?" Klopp said. "Years ago we told ourselves we wanted to create history. That was history but obviously the wrong type.
"We had big chances which we did not use, but when you concede seven I'm not sure you can say it would have been 7-7.
"We made too many mistakes and massive ones obviously. It started with the first goal and around the goals we made massive mistakes.
"We lost balls in the wrong area and did not protect properly. It looked like we lost the plot after it went to 1-0. It is not an excuse.
Klopp believes the growing scoreline happened because Liverpool were pushing for goals while leaving themselves too open at the back.
"Normally you can be 1-0 down and do the stuff you want to do. We created but did not protect ourselves properly so each ball we lost was a massive counterattack," he continued.
"That is why we conceded and three goals were deflected. It's unlucky but it is not a coincidence because it means it was not a proper block. There is nobody to blame apart from me and us."
They would finish 18 points clear of Manchester City, and in that season they would not lose their first game until February, versus Watford.
As they defend their crown, they have already lost a match just four fixtures in.