It usually means what it says.
Your application doesn't meet the qualifying criteria to be moved on to the next stage (usually interview offer) at that point in time.
Companies will often keep applications on file so that they can use them if vacancies arise in the course of the current recruitment cycle. Sometimes people are selected who decline an offer. Sometimes people fail their training. Sometimes vacancies arise that were not accounted for in the initial rounds of recruitment. Sometimes plans change at short notice and additional vacancies arise as a result.
It is time consuming and cost ineffective to have to launch a new recruitment programme (advertising etc.) in such circumstances, so a "file" provides a current resource to utilize. Of course it doesn't necessary follow that every application in such a file would qualify in such a circumstance, but it both provides the resource and provides an opportunity for a polite response and gentle letdown.
I wouldn't hang your hat on such a response, but move on to the next opportunity. There is always a small chance you will be surprised, but in reality it is a small chance.