Actually, the type of discharge you are talking about is called an Entry Level Separation (ELS). There are many reasons for an ELS. Failure to adjust is one of them; so is a family emergency, fraud in an enlistment contract, and so on.
The code on your DD214 should not cause any negative connotations later in your life. However, if you ever want to join the military again, you will have a problem being able to do so. You'll have to explain what happened, and why; and why you should be allowed back into the service.
Here is an Army Times article (the Army Times is the official newspaper of the Army) about ELS: http://www.armytimes.com/community/ask_lawyer/military_askthelawyer_111108w/
This is from the article:
"There are two routes to an ELS. First, a service member may submit a written request for discharge with any documentation that supports the request. For example, if the reason cited is an inability to adapt socially or emotionally to military life, a letter from a mental health professional, health care provider or other counselor would provide strong documented support for discharge.
The second route does not involve a request for discharge but instead allows the service member to approach the commander and present any problems. I generally find that a direct request for discharge is most effective when the recruit is still in basic or advanced training."