What you fail to recognize is that YC is funding a disproportionately large number of founders who have little to no work experience. this leads to situations where the founders have no idea how to protect their company(including their investors) from harassment and discrimination lawsuits, or the attendant PR nightmare that hurts all their fellow batchmates.
I happen to think this is not enough but at a minimum I've always found it rather surprising that the money invested in these companies didn't want to protect it from the stupidity that is inherent in most young people. To be clear, I mean this as stupidity of youth, ignorance, naivete.
At bare minimum YC needs to require its founders to be trained in some basic legal 101 stuff since they haven't yet had to learn it on the job in a corporation.
(and hey, If I'm going to make a wishlist, add some leadership training to this, too. If you want to make young people into CEOs you need to teach them how to do it. Building a great product is absolutely NOT synonymous with building a great company. If experience has no value to them in hiring, they're learning that somewhere, and it needs to be corrected by the investors--if not for the morality of responsibility to young people looking to them for guidance, but to vouchsafe their own investment.)