Was he just applying for the AFROTC scholarship to pay for college? If so, there are other ways to go about paying for college since he did not receive a scholarship this round like thousands of other worthy applicants. If he wants to serve, he can still join AFROTC or any other branches ROTC detachment at his college of choice. He could even commission some through some other route like OTC or the National Guard after college, or he could apply for a Service Academy next application cycle. I know many frustrated and upset applicants and parents vent on this site, but to expect people to agree with you that the Air Force threw your son to the curb or that something is fundamentally wrong with the system is naive. My advice (if you want to take it) is for him to get up, wipe the dirt off his knees, and do the best that he can at his plan b. If he wishes to he can reapply for an AFROTC scholarship in college; I hear they like to see the tenacity of those who better themselves and reapply.
On a side note... you seem to be very upset that he is going to his plan b. Make sure that you are supportive of him and not making him feel worse because he could not get his plan a. You keep referring to "we" and you both having to do his backup plan. I would advise you that when he goes to college, especially with ROTC or the military in general, there is no more "we". Mr. Mullen, the saint that he is, always emphases the importance of the parents stepping back and allowing their child to take the reins, and I must agree with him. Your child is an adult now and is ready to go off into the world. You have worked hard raising him and shaping him these past 18 years. Allow him to take those reins and leave the nest without the added pressure of feeling like he disappointed his parents.