For the Warriors, who had a record 73 wins during the 82-game regular season, Sunday's defeat marked the first time since November 2013 that they have lost three consecutive games.
The Warriors were in complete control of the series but were ultimately undone by the disappearance of their high-octane offense, a suspension to defensive stalwart Draymond Green, a season-ending injury to rim-protecting center Andrew Bogut and defensive specialist Andre Iguodala dealing with a balky back.
"I knew what we were capable of, even being down 3-1 versus the greatest regular season team ever," said James.
"Everybody counted us out and that's when we strived the most and that's definitely when I strived the most when everybody counted me out."
After a record smashing regular season the Warriors could not cap off the campaign with a second successive title, unable to deliver the knockout punch after going up 3-1 in the best-of-season series.
"Just an incredible run that obviously didn't end the way we wanted it to," said Warriors head coach Steve Kerr. "It's been an incredible two-year run. We're disappointed that it didn't go our way at the end, but that's life."