I don't know why these situations are still called FRIENDS with benefits, there is very rarely a friendship foundation present.
Let's be honest they are simply about sex (physical attraction) and company, when one party goes onto find someone they want a potential relationship with they rarely stay 'friend's with the other person. Would you want your b/f g/f remaining friends with someone they only met up for casual sex with, most wouldn't.
I think, despite my disagreement over the label attached, I don't have an issue with these arrangements as long as you see them for what they are. Ime it's difficult in most cases because one half of the arrangement usually develops feelings (understandably) and then things get tricky.
I've had 2 or 3 of these over the years and I've been both the party that developed feelings as well as the other party who wanted to keep the situation as was while the other person wanted to explore a deeper level of connection. Neither sides of the coin are pleasant.
The person who doesn't want to change the status quo very usually ends up the 'bad party' when in reality they haven't done anything wrong apart from not want to change the set up. I avoid these scenarios at all costs now for that very reason.
Op I'm sorry you're upset but as previous posters have advised sometimes these situations just don't suit you. It hurts, rejection is never nice, especially when you get emotionally invested. I would just say going forward try to ensure that if an opportunity for this type of arrangement presents it's self again, enter it knowing that it's just about a stop gap, having casual sex regularly with one person and spending a bit of associated time together. Remove the friend expectations, friends don't have sex. If you can do that then there's nothing wrong with it and the scenarios can be mutually fulfilling at points in your life where you don't want a relationship.
If you don't think that's possible to do, stay single until you find someone you want to explore a relationship possibility with.
As long as you've learned through the experience it hasn't been a waste of time and will help you get over the negative feelings surrounding this example much swifter. Hope you feel better soon.