Again I find myself saying, "I would post about this article even if it didn't involve my author." Shawn Graham, Associate Director with the MBA Career Management Center at UNC's Kenan-Flagler Business School, writes a nice blog. And this week he had a great post about internships.
In a nutshell, he's saying that there are many reasons why a company might not want to hire an intern, and often the pay isn't the biggest obstacle. There are also the problems of nobody having the time to supervise the intern (it's a big time-eater keeping someone busy all the time) and not having space for an intern.
Shawn has some ideas for anticipating objections and having a plan for getting up to speed quickly, which should make you a more attractive internship candidate.
Shawn notes that the biggest companies are now done with their on-campus intern recruitment for the year, so you'll have to look harder and work toward creating some opportunities for yourself at this point.