Well, that's science for you. A paper that I worked long and hard on was sent out into the world, and I've got it back torn to shreds and covered in red ink. Yes, my paper was rejected. These things happen.
One of the reviewers thought the paper was OK, while the other one thought it had some serious flaws. The editor agreed with the second reviewer. I can't say that I'm happy about it, but I have to admit that the criticisms are not unfair. Still, I think the observations in the paper are useful and interesting, so I'm going to mount a salvage operation, and attempt to re-submit the paper.
It's not nice to have your work criticised, but of course, that's how science works. You submit your work for rigorous examination by other experts in your field, and only the best stuff makes it through. If the paper does eventually get published, it will be much stronger as a result.
At least, that's what I'm telling myself, but I can't pretend that it doesn't feel like a kick in the teeth...