I now retire stories that I once thought were good. I'll blame it on naive delusions of grandeur which still help to push me along in my writing career. I feel embarrassed that I once submitted stinkers to magazines/journals. The more I write the better judgement I have of knowing when a story is about developing craft (practice, practice, practice) or if it's worth sending out to the world. Writing, good or bad, is never a waste of time because even a retired story usually has lines, dialogue, or scenes worth harvesting and planting into future stories. I transplanted passages from my very first short story (long retired) to my most recent piece, the two seemingly unrelated.
What if a story is a favourite? I have work I am determined to get published, but wonder if my personal attachment outweighs its merit. How many rejections are too many? One has ten rejections thus far, but I haven't lost faith so I continue to send it out. And, if no one wants it? I'll put it in a book if I still love it down the road, fuck it if the editor doesn't like it (positive delusion). Or, maybe I'll think it's crap by the time this happens.
Before you retire a beloved story have one last look. Have you responded to feedback from editors, teachers, and peers in rewrites? This worked for one of my published stories. Perhaps, re-workshop or have a trusted writer/friend have another look. Ultimately, intuition is your best guide. When you lose interest in reworking or submitting a story it is time to put it to rest.