This post, written in 2006 by MIT admissions officer Ben Jones, gives you a great look at just how personal–and difficult–the process of selecting a freshman class can be at a highly selective college. They spend November-March deciding who they want to admit, people they are sure deserve to attend MIT (and you can imagine what that applicant pool looks like). Then, as Ben puts it,
In March I go into committee with my colleagues, having narrowed down my top picks to a few hundred people. My colleagues have all done the same. Then the numbers come in: this year's admit rate will be 13%. For every student you admit, you need to let go of seven others."
That's why you can't blame yourself (or them, really) if you are denied admission from a highly selective college. It doesn't mean you failed and it doesn't necessarily mean they didn't think you deserved to be admitted.