Town should have had a penalty before Southend's controversial opener, which the hosts claimed should have been disallowed for offside.
United netted a second before the break and then survived a second-half battering in which Ipswich twice struck the woodwork, but also lost Alan Lee to a red card for a second booking.
Town had earlier seen new loan signing Francis Jeffers limp off after just 27 minutes, having been the catalyst for the 5-2 midweek drubbing of Hull.
Southend began well with the hosts slow out of the blocks as Freddy Eastwood shot wide from the edge of the box, Kevin Maher fired a free-kick straight at Lewis Price and the home keeper also denied Lee Bradbury from a tight angle.
Jeffers had Town's first chance on 17 minutes when strike partner Alan Lee headed down an Owen Garvan cross, but he completely mis-kicked 12 yards out.
Garvan shot wide after a quiet spell in which Jeffers was replaced by Danny Haynes before Town had a big shout for a penalty when Gary Roberts fed Lee who went down under a Peter Clarke challenge.
Replays showed Lee was caught by the defender's follow-through as he came inside his man, but referee Martin Atkinson, who was on duty for the Liverpool-Manchester United game last week, said no.
Darryl Flahavan saved a Lee 20-yarder and Dan Harding got back well to deny Eastwood before the Shrimpers controversially went ahead on 35 minutes.
Mark Gower's cross-cum-shot from the left wing was dummied by Efe Sodje, who was standing in an offside position in the line of goalkeeper Price, who was left wrong-footed as the ball rolled in off the far post.
Ipswich were furious, with Lee booked for dissent, but they channeled their anger into an attempted fightback as Garvan shot over, Flahavan saved a David Wright free-kick and substitute Haynes was cynically felled by Lewis Hunt on a quick break, but astonishingly wasn't booked.
Southend doubled their lead on 42 minutes when Harding pulled down Simon Francis by the corner flag and was booked. Maher floated in the free-kick, Francis glanced it on and Clarke stuck out a leg to deflect the ball into the roof of the net.
Ipswich came out firing at the start of the second half and created four fine chances in the space of three minutes.
Garvan drilled the ball against the post after Flahavan flapped at a corner, Sylvain Legwinski shot over from 20 yards, Flahavan turned over a Garvan volley from the edge of the box and Legwinski glanced a header onto the roof of the net from Roberts' corner.
Southend survived that surge and had a chance of their own when Jamal Campbell-Ryce shot wide, before Roberts collected a Wright pass and stepped inside Clarke before curling inches wide.
Haynes glanced a header over from a Wright cross and then missed a great chance when a superb Lee reverse pass sent him clear, but he opted for power over placement and Flahavan got down to beat out his low drive.
Southend could have sealed it on 65 minutes after a swift break which saw Eastwood sweep the ball wide to Bradbury whose low cross found Gower and his goalbound shot hit Wright and dribbled inches past the post.
Sub George O'Callaghan was denied when Flahavan blocked his close-range volley after a Lee nod-down before Eastwood should have sealed it after another quick break, but Price did well to beat away his fierce angled shot.
Any hope Ipswich had was snuffed out with 12 minutes to go when A;ex Bruce's long ball was flicked over the advancing Flahavan and into the net by Lee's hand. Ref Atkinson spotted the offence and issued a second yellow and ensuing red for Town's leading scorer.
Sub Matt Harrold had a header saved from a Campbell-Ryce cross for Southend before Town's day of misery was summed up in stoppage time when Haynes volleyed against the same post Garvan had hit earlier from a Wright cross.
O'Callaghan sent a fizzing 25-yard free-kick just over before Flahavan and Billy Clarke were both booked in stoppage time, Flahavan for time-wasting and Clarke after an off-the-ball scuffle.
This result ensures both these teams remain involved in the relegation dog-fight, with Ipswich not safe yet despite two wins previously to this loss, while Southend now have back-to-back home games to try and boost their survival hopes further.