Doing this without compensation is ABSOLUTELY doing something wrong. Maybe not necessarily tortious, but certainly unethical and indicative of someone who should not be trusted in a business relationship. The YC company made a mistake and is sticking someone else with the bill.
FWIW, There's a certain amount of "foreigners are expendable" mindset that seems to exist in the American tech sphere that might factor into this situation as well...
The company paid me a 6 week severance, even though I never worked a minute for them, just to compensate me for what I had given up.
http://en.wikipedia.org/wiki/Promissory_estoppel#Promissory_...
Not necessarily. What if a major investor pulled out and they aren't going to have the capital available to hire this guy? What if hiring him meant not paying people who had been promised salaries after working for free? What if they could have hired him but others would have had to be fired?
They certainly made a mistake, but we don't know why they did what they did. It's unlikely to be malicious "Let's just screw this guy", and far more likely to be for reasons that each one of us, if we were in their shoes, would consider to be very good.