Could not agree more. At my company, we have rejected people only to have them become huge advocates for us and send us even more good people. We usually look for a special mix of talents (some balance of CS + chemistry/materials), and we always look for a great cultural fit, and sometimes that means we turn down pretty great people who totally get why the fit isn't right. This is painful because we have had a couple open positions and rejected people that would might have done a fine/decent job in the short term, but because we are small (5 people), we are looking for the right people to grow our company with us.

I truly believe that the way a company treats those who don't make it through the process is a stronger indication of their culture and their long term treatment of people than how they treat their employees today.