We penalize indignation and/or sensational stories unless there is something unusually interesting about them. Indignation does not gratify intellectual curiosity, which is the mandate of this site. It does, though, attract large numbers of upvotes—most consistently. That's a weakness of the voting system and a countervailing mechanism is needed. If we didn't have one, indignation would dominate HN, and that would be fatal. So we can't go by upvotes alone.
Second, we don't censor posts for being anti-YC. That's literally the #1 rule of HN moderation—it's the first thing pg explained to me. We get accused of doing so anyway, of course, but it's important to be able to answer in good conscience. So when an indignation thread is YC-related, we may still penalize it, but always less than we otherwise would.
(Why do we penalize them less instead of just staying completely hands-off? Because that wouldn't be good for HN. There are a bunch of concerns we have to balance, and giving anti-YC threads carte blanche would neglect those other concerns, e.g. the quality of the front page. It would also be a truck-sized loophole that people would soon exploit.)
Third, there is software to detect flamewars and downweight such threads. Since indignation breeds indignation, that often kicks in on such posts.
Finally, anything beyond the above is the effect of user flags. This sort of thread always gets a lot of flags as well as upvotes. If you see a post whose score is growing and yet whose rank is falling, that's usually because it's attracting flags as well.