Tobias Buckell has some excellent advice about when an author should stop submitting (or trunk) a story:
I use a couple things to figure out when to retire a story. As a writer ... you should obviously be growing enough each year that you look back at something you wrote a year ago and see flaws. If you're not looking back on even earlier writing and seeing how much better you are now, then you are not growing as a writer. You should be able to see how much your earlier efforts suck, but also, you should also be able to spot bits of polish and neatness. So the earlier work is easy for me to spot what's out of sorts.
If I don't obviously see why the work sucks so bad it shouldn't be submitted, the next metric I use is: has a work has exhausted all the markets I submit to? If so, then I retire it.
Tobias also mentions that of the 130 short stories he's written, he's published just over 30 of them and has trunked about 95. That gets us back to the best advice for any writer--keep writing. Some stories are simply going to fail. But what you learn from those failures will help you succeed in a new story further down the line.