Did you know that YC takes 7% of your business, whether or not you get funded a demo day? Shark Tank may be a better deal. Or not. But it is ridiculous to argue that based on the fee for a prime time infomercial.
Why are people clamoring to get accepted by YC? I'd be doing everything I could to make it a last resort, not a means to succeed.
(this is sarcasm btw.)
More seriously: you're giving up 6-7% of your company in return for a whole swathe of things that are very likely to increase your chances of succeeding significantly. Most people don't have ready access to the kind of personal networks that YC offers: the combination of that access, plus the social proof of having the YC imprinteur massively increases the likelihood of success for many, many startups.
And I'm saying this as someone who's very unlikely to ever apply to YC, but even I can see the benefits in applying, as do many others who choose to go to YC even if they don't in fact need the money: the fringe benefits are worth far, far more than the cash.
The owners are well aware of both situations, and it's their right to make the choice. For some businesses, that 5% is well worth the prime time informercial. And I imagine everyone who's received a YC offer has accepted as well.
I just stated that they do it.