IMO YC depends on its branding as the exclusive, "Harvard of incubators," and if they keep funding so many startups they are going to lose that edge and create the space for a new YC.

Each class is like 130 startups now, right? I keep seeing startups that duplicate other existing YC startups. I just imagine as an investor you have to be thinking "Ok, now there are 2 or 3 or 4 times as many startups as 3 years ago being pitched to me that are going to fail."