That is, after all, the point of credentials--having credentials indicates a safer risk but it does not guarantee the likelihood of success.
True, but an equivalent statement can be made by a decision maker at any other reputable credentialing institution as well. How is this substantively different from what an admissions officer at MIT would say?
I think the GP's point is that, for the credential obsessed, "getting into YC" is just the "getting a Rhodes Scholarship" or "getting a Supreme Court clerkship" for our milieu. I don't think that is an indictment of YC in the least.
Ultimately the OP's argument boils down to the claim that YC solves the credentials trap by ... transforming starting a startup into a credential, as long as it's done with the YC imprimatur. Hardly a solution at all.
(Ironically, there is a solid argument to be made about how your essays have done a huge amount to legitimize the act of founding a startup and embolden erstwhile credential seekers to take that risk, even if it doesn't come with a name brand institution attached to it. The author fails to make that point, though.)
I'm not saying you're bad at picking people. And, for partially self-serving reasons, I don't think MIT is bad at picking people, either.
I'm saying that your ability to pick people is orthogonal to whether or not YC solves Chris Dixon's credential trap. The "trap" is a pathological behavior in the seeker, not a claim that credentials are meaningless or that the people who award them are incompetent.
Moreover, one can't arbitrarily claim that graduating from a top program in one's field is merely a credential, but completing the top accelerator isn't. They're both valuable, but neither of them is "solving" the credential problem.
I guess it's an issue of defining the ultimate goal. If the ultimate goal is being a co-founder of a successful startup then YC is likely the key penultimate step in the ultimate achievement whereas Google and Stanford are potential credential traps.
But if the ultimate goal is a PHD at Stanford or a research fellowship at Google, then maybe YC is the credential trap erroneously viewed as a step on the path?
In this way, 'hey i'm dropping out of school!' is frowned upon... but perhaps 'hey, I'm dropping school for yc' is a different external validator. Again, for the person seeking the credential.