I've been using variations of the term "friend zone" for years, and it's also worth noting that I think I'm a tad older than this new "generation" of "friend zoners" (quotation marks!) My usage has always been what many above have defined: a friend who has developed feelings for another friend, and who has, in some form or another (always direct) suggested moving into a romantic, rather than platonic direction and had their suggestion shot down. This has happened to me more often that I'd like to admit, but generally I remain friends with the woman, unless of course the relationship becomes toxic (such as her using me for emotional intimacy because her current squeeze is emotionally unavailable).
In almost all of the cases I do not blame her. I'd usually blame myself for whatever shortcoming may be applicable. This is not a good thing at all, and thankfully I've grown out of it (mostly). Do I become bitter? In some cases. However, this is not the type of bitterness that warps my views into anything horrible. Unless you count the realization that women can be as shallow as men sometimes as something horrible.
One of the reasons I think I keep "falling into the Friend Zone" is that for me, attraction is rarely entirely physical. A good portion of it is emotional and mental. And the only way you can uncover those attributes is by spending time with someone, which generally develops into a friendship. By then, that classic line of "I think we should just be friends" is fairly valid. But you know what? You freaking deal with it. You think you love her/him? Well, it takes two to tango, and if they aren't returning the feelings, it isn't actual love (in my mind, at least). And let's face it, trying to make them love you like you're in some stupid romcom isn't going to work. It either happens or it doesn't. The sexual legos either click or they don't.
Now, this bastardization of a term I was using before some of these people were alive IS vile, disgusting, and stupid. It reduces another human being into nothing more than an objective that can be achieved by meeting a set of conditions, as if this were a video game, specifically a dating sim. And dating sims are about as accurate depiction of real life as its potential mates are an accurate depiction of women.
So now I've found myself not using the term, as it's picked up negative connotations. It's probably for the best, as it was a rather reductive term. However, to all those who say that the Friend Zone doesn't exist, I counter with this: it was a term I used to refer to a specific event or circumstance. By saying that it doesn't exist is the same as saying eclipses, an engine overheating, or something shattering does not exist. It is a collection of sounds that I use to describe something that happened. That's it. Our definitions may differ, and your definition may indeed not exist in the real world, but MY definition does exist in the real world.