Fly-half Dave Walder had the chance to secure a memorable victory with just a minute remaining but he sent his penalty attempt wide of the left-hand upright to ensure the French giants held on for an 18-16 win.
And Hanks, who is experiencing his first season of Heineken Cup rugby as Wasps boss, admitted it was hard not to think of what might have been, even if he is massively proud of the efforts of his entire squad.
"There's real disappointment in our changing room," said Hanks immediately after the heartbreaking reverse.
"We came here to win and didn't just come here to make up the numbers. It didn't matter what anyone else thought. There was enough belief within our side and we prepared well."
In a game in which the pouring rain was a major factor, Wasps fought for every inch against a Toulouse outfit who claimed their fourth European crown only five months ago.
And whereas the home side's points all came from the boot of David Skrela, Wasps registered the game's only try through replacement wing David Lemi.
"There were some special moments such as David's try and the way we kept hold of the ball," added Hanks.
"And we were excellent in defence for the second week in a row, but Toulouse are a quality side and they just kept coming at us.
"But I'm really proud of the players. What we need to make sure of is that people aren't just talking about what we did in Round 1.
"We have to kick on next week because we still want to qualify from this pool."
Next up for Wasps is a home tie with Glasgow Warriors, the side who currently top the group following a 21-13 win over the Dragons at Firhill on Friday night.