Are you under 18 or over? Are you and your parents UK nationals or Citizens of Ireland? Was the reason for living in Wales your education or for your parents employment? Lots of things are taken into account when deciding fee status.
Surely, if you believed they had given you the wrong status, you should have questioned it sooner and not now try and use it now as a way of justifying, or challenging, your rejection.
Sorry to say this, you could go around and around debating the rights and wrongs of your fee status, but the simple fact is that StA gets many more applications than places available and this time you were just unlucky.
The Scottish university system is different to that in England and Wales. Maybe other people had a P.S. more suited to StA. I dont know what subjects you're studyihg, but maybe they had better subject combinations (i.e. successful applicants may have science and humanity/essay based subject) who knows!
I don't mean to be unkind, but remember that you said you were unlikely to have firmed StA anyway, so why waste time worrying about something you can't change?