I've discovered that they are necessary. The roads to success are actually paved with them. For every contest I win, I lose a few to obscure artists in Alaska and theatre critics who live secret lives as playwrights. I actually look forward to rejection letters. The more I get, the closer I am to landing that huge production.
Failure makes success sweeter.
It reminds us to be appreciative of all that is good. It shows us that we truly can overcome anything. But if we're not careful, we'll take failures personally. We'll see them as indications of our worth, or lack thereof. We'll get frustrated.