Private First Class Bradley Manning is in military detention, suspected of giving the classified information to WikiLeaks which was then published in newspapers around the world.
Mr Cowley said the US soldier's treatment by the Defence Department, which includes solitary confinement and being forced to sleep naked, "is ridiculous and counterproductive and stupid," a BBC reporter wrote on her blog.
"Nonetheless Bradley Manning is in the right place," Crowley said, adding "there is sometimes a need for secrets" to advance US diplomatic interests.
Later on Friday US President Barack Obama insisted the Pentagon's treatment of Pvte Manning was appropriate.
Pvte Manning, 23, was arrested in June while he was deployed in Iraq, amid suspicions he had passed a trove of secret US government documents to WikiLeaks, the whistle-blowing website.
Last week the US military unveiled 22 additional charges against him including the serious offence of "aiding the enemy", which carries a potential death sentence. But the army said he would face possible life in prison.
In his statement Sunday, Mr Crowley said his remarks "were intended to highlight the broader, even strategic impact of discreet actions undertaken by national security agencies every day and their impact on our global standing and leadership."