Google is trying to start a movement with the Chrome OS. They're trying to win people over to the thinking that you don't need a desktop. So the dynamics here are more like a political party than a giveaway. As such people are bound to get emotionally invested and their feelings of rejection are bound to be amplified if they are rejected from that movement (imagine a political party that only accepted people's support after an application process)
As I said it's a necessary step because this is a testing process and Google does need a certain profile of person to test. But that doesn't mean it isn't going to sting people if they don't get in.
Again it's not the same as other closed Betas. It's a movement towards an entirely different computing model. One that not everyone accepts is valid (in fact I'd argue most don't think a completely browser based computing experience is valid at this point). So what Google needs more than anything is people who are passionate about that idea and who will strongly advocate for it.
So when people are rejected from the program I don't believe they'll cry but I do believe they'll feel less passionate about the idea as a whole.