But I don’t want Paul to be one of a small group of people who decides which companies get funding—not because he isn’t smart (he is) or a great guy (he is). When it comes to innovation, central decision-making is bad, no matter how good the decision-makers are.
I don't get this POV. It's not like YC is the only place to find companies that are worth funding by angels. Getting "pushed out" of the "YC ecosystem" is not the same thing as getting "pushed out" of the "startup ecosystem" as a whole. If you find that you can't invest in the YC companies anymore, find another incubator to work with, or deal with startups on an individual basis.