I've heard this phrase repeated over and over throughout my life, and as I get older and see more things, the more I disagree with it. Maybe a lot of people say this particular phrase because they feel that it's equivalent to the phrase, "When God closes a door, He opens a window."
I believe in God. I have a strong faith, and I am constantly working at it. I have learned through my faith journey (if you will) that when I am seeking God's will, I find peace. Some events require a lot more spiritual work than others, I'll admit.
This phrase, "everything happens for a reason," always nags at me because I feel that it's a culprit to one of the arguments that the doubters of God seem to always have. "If your God is so wonderful, why did He let <insert some awful tragedy> happen?"
Good things happen to evil people, and bad things happen to good people. Our world isn't a place of justice. It's a world filled with human beings, animals, and the forces of nature. God doesn't kill people (at least, not since the days of the Old Testament). God doesn't stop bad things from happening. Things happen. The storms fall on everyone. The sun shines on everyone. There isn't always a reason. Things just are the way they are.
I believe that most times, an answer to prayer is not what was anticipated. I think this is where the dreaded phrase was born.
It is exactly because there is no reason in some happenings that I need my faith. My faith helps me cope with those things that cannot be explained with reason. I know (and am also related to) people that feel that anything can be rationalized. I can see the point in that, of course: it helps them cope with those things that many would claim cannot be explained.