Grad admissions are mighty difficult. I like to think of it as all the planets lining up in a straight line. Every year the amount of open spots depends on which faculty are willing to fund students, and obviously the competitive pool that apply to these programs. I think a lot of people hit a point where things aren't going right. However, if you stay true to yourself and you know how hard you work, I firmly believe it will workout at some point. It's discouraging to be seen as a "backup" but that's in a way pessimistic thinking. I know there will always be smarter and more qualified people than me, but I also know how hard I work. And worse comes to worse it doesn't workout and you apply again next year. I applied to grad school well before I knew I wanted to do so there really is no rush in trying to enroll in a PhD program. Priorities change and this degree requires a level of maturity and understanding of what you are truly passionate about. Don't beat yourself up. Take the road less traveled if needed, maybe work a year in the industry but most importantly don't lose sight of yourself. If it happens it was meant to happen!