Sumner led this country's most glorious and fondly remembered football crusade, when he captained the All Whites on the long and successful qualification campaign to make the 1982 World Cup finals in Spain. He said the Olympics would have provided career highlights for some of the current under-23 squad.
"I'm terribly sad for the young football players and all the football people who have followed them" he said.
"Fancy playing in Brazil, at the Olympics. I would have loved in my time to have been part of an Olympic Games village - it would have capped everything off for me.
"It is that important to play (in the Olympics) that Ryan Nelsen said yes twice and skippered the team while at the peak of his professional career.
"It is a very sad time for New Zealand football...the Olympic Games could have been the absolute peak for some of these players and they will miss out through no fault of their own."
Sumner would not speculate on funding implications, but said: "Who knows what else (FIFA) might come up with - a fine, or international ban."
He added: "A lot of people down the years deserve so much credit for the time and effort they have put in to develop players, to get New Zealand to the stage it is at now.
"(coach) Anthony Hudson is supposedly looking for players worldwide, he even said so on UK radio stations, but it is a pointless exercise if you are not armed with complete knowledge of the rules.
"Personally I wouldn't look too far (for players). I'd keep looking out but not desperately because there are new players coming through the game here every year, knocking on the door. yes, Winston Reid was a fantastic (overseas) find, but he is a Kiwi."