How do you accept rejection?!

I received a rejection letter today from a really good summer internship that I was in hopes to get accepted. I am not sure how to accept this rejection, as I have wanted this internship from the start. It was a big, huge competition and yet I still applied for it in hopes that I too have a chance to get accepted, but in pain when I read the rejection letter.
I just really wanted this and now I don’t know how to take it in. Do I smile and let it go? Do I accept the fact that at least I applied for it and move on? Do I think to myself that I failed? Or, do I just forget it?
What would you do if a little part of your dream let you down?