For those of you who applied, but were turned down, you should apply to future events until you get an invite. And as soon as you do, try as hard as you can to attend.
The event is seriously worth it -- even if you have to travel from some distance away, like I did. The chance to interact with the YC founders, and realize that they are really far more down to earth than our imaginations might make them seem -- ok, maybe just my imagination--, is really enlightening.
I'll admit that my doubts made me seriously contemplate not applying; against all the giants I would be competing against for an invite, what chance did I have. I imagine it is reasonably similar to the sort of doubt potential founders feel when they think about submitting an application to a YC funding round; the competition is bound to be insurmountable anyway, so why bother. That I have a reputation amongst my friends for being pretty self-confident makes me wonder just how severe of a roadblock this can be for most people against themselves, before anyone else even has a chance to weigh in. Either friends are wrong about me, or this is a legitimately huge impediment.
My thoughts eventually boiled down to this: what do I have to lose? Pride and dignity, maybe, but only if I let that happen. So I applied, against what doubts I still had.
Of course, all of the above advice is predicated on YC holding more of these events, which I sincerely hope they do. I'm sure there are many more people who would greatly benefit from being able to attend, and I'm at least reasonably sure the YC founder crowd would benefit considerably in meeting more potential employees at another event like this.