Does anyone have any advice on how to stop letting this effect your self-esteem?
I have never had problems with self esteem. I suck at some things, and I know it, but I am good at other things. My parents always made me feel I was good enough and capable enough to do anything I put my mind to. I had other girlfriends before I got married and I had a lot of positive feedback from them even though all of them either dumped me or I dumped them. I was cheated on by some of the girlfriends. Looking back, probably some cheated on me and I didn't know about it.
I got engaged in my late 20s, and I dated and had girlfriends since high school, so I had a lot of girlfriends, and a few serious ones before I got engaged. Many who dumped me came back months and even a year or two or three later to sniff around to see what I was up to - I think people here call it "fishing." And my eventual wife is someone I had dated briefly earlier in my 20s and our circumstances didn't make the relationship realistic at that time.
I think there is a difference between being rejected and being affected by self esteem. Definitely you are being rejected, you are there and available and she chose another guy. I know the feeling of rejection, and I have never had it since I've been married. And I think that is a big distinction, because when I was single, and I was rejected, I usually felt better and forgot about it when I started having an interest in another woman. Me and my friends and my brothers, if we had a girlfriend who rejected us, frequently the feeling was to want to stay home and sulk, and the friends would drag out and go out and get back in life. Meet with girls.
Now as a married man, I don't advocate that, but I do think if you have a friend or brother who can do stuff with you, get you out to stuff you like, bowling, softball, volleyball, or just go out to a local social-type bar and not drink too much but get a little social. Even if you volunteer somewhere. Try to force yourself to go out there and do stuff that involves something social and something that involves both men and women. Even only men's stuff like men's basketball, softball I think will help.
Now as far as self esteem, I really don't think that goes up and down that easily. I don't think that really is what you've got here. Self esteem I think is the type of thing like you deep-seated "you," like your morals, or your personality, I think it comes probably from your childhood and it doesn't really change all that much. Not so with rejection, which is different than self esteem.
I don't think you should expect that your wife will some day come back to you "fishing" or even crawling back and begging, but that has been my experience in at least a decent number of my past girlfriends. For one thing, you were "good enough" and really way more than that, the woman wanted to marry you, and spent all this time with you, so you definitely are good enough. Also, I don't hear from your wife saying "you're no good" but rather she got too close to another. You know there is nothing wrong with you.
All this time she was with you and had no problems, never told you any problems, and then just begged for you to stay married, and when you wouldn't, she chose this other man as second choice. Granted, she is pretty fucked up mentally, as far as which one she wanted, but think about the arc of her relationships.
Now, despite I had a lot of girlfriends, I don't think I ever went from one girl to another with no time in between. There always was at least a month or so that I had no girlfriend. I always wondered how any men or women could jump from one right into the next. I question your wife, too, for that. How do you jump from a 14-year relationship with a 7-year marriage and jump straight into a headlong soulmates type love with some guy like that? Why question yourself about some type of situation like that, if you saw this from any other person but yourself you would objectively see this, but since it has happened to you, subjectively maybe you are introspectively somehow thinking it is about you. Her behavior in my opinion is a bit dysfunctional, meaning not healthy.
Objectively from the outside here, your posts have been rational and insightful, your wife looks like the one who is a little irrational, thinking that this other man who she got involved with just such a short time ago relatively speaking, and she's ready to bring him into her house, and then somehow thinking you would pay her and him to live there. So she is the one who is not based in reality.