Adams looked set to record a long-awaited first victory as manager of his hometown club as the Blades surged into a two-goal lead inside the first seven minutes at Glanford Park through goals from Ched Evans and Richard Cresswell.
They continued to dominate for much of the first half, but Joe Garner scored twice before the break - his first coming from the penalty spot - to drag Scunthorpe level before Lee Miller headed a second-half winner from Mark Duffy's free-kick.
Adams said: "Obviously it's a massive blow to lose to one of your closest rivals in that bottom area. We had a good half an hour, dominated, got our rewards and were 2-0 up and cruising. Then we gave away a stupid penalty and all the old worries appeared.
"The goals we conceded tonight are criminal. Three individual errors.
"We've talked about having a bit of desire in their box when we've got set-pieces and we lack that and we lack it when we're defending as well, so you have to question the heart of the players. They certainly don't want to get hurt, that's for sure, defending them or attacking."
Source: PA
Source: PA