there's a lot to say about the delivery of the award and how it was presented, though something tells me it wasn't meant to be one of those "you got smoked, but you'll get 'em next time" kind of messages.
as for the pain your son feels, wanting to step up, giving it his best, and sense responsibility to his team, well, that is the mentality of a champion. i remember a HS 2 mile race back in '93. it was a dual meet on an old cinder track. my bro and a rival led the race until the last lap, where my brother opened up a gap and won by a few seconds in just over 10 mins. it wasn't remarkably fast or anything, but the kid in second place was really hurt, i mean it really had an impact on him mentally. he needed to win, gave everything he had, but it just wasn't enough. you could see the disappointment in his face and the sense of responsibility he felt towards his team. a few of my teammates made comments that it looked like he was going to cry, or may have even shed a tear or two. two track seasons later this same kid was in a two mile race, where on the last lap there were several guys ahead of him, but on the final stretch he came barreling down the last 100 meters in ungodly closing speed. he had finished first, his last lap was timed at 60 seconds, he PR'd with a 3200m in 8:58 and two mile of 9:02. he had just become the HS National two mile champ.
tell your son not to lose that mentality. i'm not saying your son will be the next national champ, but that kind of mentality is what separates the true competitors from the also-rans.