I have seen all sides of this.
I was rejected after interview, genuinely didn't feel upset personally, worried my parents were disappointed, but had a fantastic time at my university and didn't give Oxford any thought at all.
My husband was rejected after interview and has carried this as a rejection for his whole life, I suspect not helped by his family who still think that it is the peak of academic achievement.
And now I have a ds at Oxford, who applied from a state school with relatively little stress or pressure, but who is totally passionate about his subject.
My own view, for what it is worth, is that oxbridge are not necessarily looking for the brightest students. DS is bright, but not a genius, and others in his year achieved higher grades throughout school but didn't get offers.
What ds has is a total, overwhelming, passion for his subject, and has since he was tiny. He says that his university friends are the same - live and breath their, often very specific, subject areas.
So, say history for example - if you are obsessed with a specific period of roman history, have devoted years of free time reading around it, and then have an interview with a tutor who shares that passion....far more likely you will be offered a place, regardless of all the prep and gcse results. You need strong academics to keep up with the crazy pace, but being bright isn't everything.
So, it's a perfect place for some people, but I'm sure I would've hated it, and I'm sure most of ds's school friends will enjoy their universities better.