I don't quite buy the scalability argument, in the end there's a natural upper limit on the YC class size and I think they're fast approaching it. There are a very small number of partners and there's only one pg. After that point, say a class size of 100 (~200 people) things will get impersonal and YC will inevitably start to converge to other incubators.
Large class sizes also inflate the alumni network, one of the best aspects (the best?) of YC. Up to a certain size, network utility increases with size; after that there are just too many people with too few hubs to connect them.
I think at the end, they just will have to fix the class size to a certain number, which will then make the acceptance ratios insanely small (currently 2%)