Rejected Again

The agent decided to pass on my book. She doesn't think I took her revision suggestions far enough and she still doesn't connect with the main character. She said the story is adequate, but not good enough to compete in today's market and, based on my past revisions, she doesn't think I'm up for the amount of rewriting required to make it better. She's the second agent to tell me that my book just isn't up to competing in today's market, yet all of my beta's have pretty much loved it. 

I am so discouraged right now and have no idea what to do. Should I have another person read it and tear it apart for me? Should I keep querying with what I've got and *hope* somebody will love it as much as I do? Should I just give up and start something new?