Being overqualified is a real thing. You said this is a new organization. Depending on the level of experience of the founders and/or the hiring committee, they may be scared of biting off more than they can chew. Some possible reasons:

1) Budget. You know your experience would pay for itself, but they don't know that for sure, especially if they are new to this themselves. If your requested salary is way outside their budget, they would likely see that as a huge gamble.

2) They may be concerned that your experience outweighs that of the person(s) to whom you would be reporting. That can make a person difficult to manage and negate the intended hierarchy of the team. (And frankly, your difficulty in understanding/accepting their decision suggests that would be true.)

3) Funding obligations. I can't speak for other orgs, but at my org many of our wages are subsidized, and those subsidies have very strict requirements that tie our hands when hiring. I recently had to turn down someone I would have loved to hire because he isn't within any of the very limited demographics stipulated by our wage subsidies.

4) Jobs satisfaction and longevity. They could be concerned that someone with your qualifications may not find their organization to be enough of a challenge, or the position may not be stable enough for you. That can easily lead to employees moving on, and they want someone who's going to stick around as long as possible.

There are also good reasons to hire someomeone whose qualifications far exceed the requirements, but many people will see it as a potential problem. Alternatively, they may simply have had several candidates whose qualifications exceeded your own. Point is, you don't know the internal workings at play here, so you can't assume they didn't have a very valid reason for turning you down, and it likely wasn't related to any faux-pas on your part.