Joining YC obviously gives you tons of other very valuable benefits, just seems to be some dissonance there in the narrative.
The full text of that sentence explains that he "hadn't really considered" YC because he "thought" he just needed cash. Not sure how you figure that he was desperate for YC; he was accepted through a chance encounter without even submitting an application.
edit: After a re-read I understand more where you're getting the desperation from, but that came after he had been accepted, and was trying to hold on to the gift he had been given. I think it's fair to say that the situation had changed sufficiently by that point.
Then he lost YC - the whole rationale of both.
Of course he's a bit shellshocked. I would be. Great tale!
VCs use YC as one signal (of many) to figure out who to give money to.
The primary reason, in my view, to join an incubator is to raise. Everything else is ancillary.
Startups are so hard you have to take every bit of help you can get.
If YC could improve their viral coefficient by .2 that could be the difference between success and failure.
If YC could improve homepage optimization and customer acquisition flow in a meaningful way, again, disaster diverted.
So many things that experts know how to move forward that us new guys often miss out on. At such an early level, it's like adding gasoline to a fire.