Take it as a compliment. Sometimes if the category is full of excellent quilts, the judge needs to eliminate a quilt to narrow down the field. If all the quilts have good workmanship, good design, good quilting but some have better binding, it's a way to find the very best. Should you improve your binding? Yes because it might have been the deciding factor in awarding the ribbons. Good Luck next time and enter it again. A different venue or judge make can make a defference too.