What do you mean by "open, public application process?" I don't see anything "open" about it. Last time I checked (last year) there was not even a list of applicants. I'm curious, how would an "open" process differ from a "closed, non-public process?"

Waste their time? They read applications so they can find the ones they think are going to make them a lot of money. It is a necessary step needed for them to make money. I'm not sure what your point is. You feel bad they have to read applications they themselves solicit in order for them to make money? Should someone else read them for them and they do nothing during the application process?

Getting their ideas vetted? Y Combinator gives zero feedback to applicants, leaving them in the dark as to why they were rejected. How does that help? Any vetting process I ever saw gave a "report" or at least some information as to why or why not a candidate was approved or not. Y Combinator does neither. As you said, they spend enormous amounts of time reading the applications (for their benefit) but zero time providing any feedback whatsoever for the applicants benefit. What does that tell you? Does that sound like an entity who is truly trying to help the developers? What do you take away or learn from that? What value does that have?