I think to determine if you are “competitive” or not, always have good readers to read your works and let them be real with you… don’t be afraid of criticism and rejections, do not have to take them personally but those constructive ones help you locate yourself, and I think self awareness helped me in writing a lot. And also in life.
I want to encourage you to reapply, if not next year, the year after the next, whenever you feel ready. But also, an MFA isn’t a requirement for you to be a good writer. If you love this thing you will continue doing it no matter what.
I’m also talking from a less experienced person’s perspective, but I think it wouldn’t hurt to take a step back and consider if you really want this life so bad that without it you cannot function. I don’t think committing to a writing life is really superior than other way of living (getting an office job, getting married and focusing on family, etc…) it is not even necessarily happier! But if you think you will not be happy without it, work hard and reach high and don’t stop pursuing it… I think I won’t be happy without it, that’s why I’m here