> But why should we believe we've hit the point where the quality of advisors and peers decline as YC gets bigger?

We shouldn't, it's the exact opposite. As the network grows, the ecosystem of high quality advisors goes up, not just because better people join, but people are learning to become better advisors through being a part of the network. Not only that, but as the network grows so does the YC economy of potential partners. Instead of YC companies purchasing goods and services from outside the network (and thus bleeding valuation of the network) keeping money flowing in the YC economy only accelerates the value of the entire network. As this monetary flow through the network grows and accelerates so does the quality of the people managing the companies in the networks and thus potential future advisors to new companies joining the network.