Spot on - in fact I wonder if YC would be open to "funding" more groups if some of those groups didn't need the money? For us it's about the network like you pointed out.
At 60+ companies in a cycle I think they're already going to start butting up into dilution.
If you have a program that is attracting the 60+ most viable candidates to start companies, it's kind of odd to expect that group to go into left field to start tapping risk-averse people for whom salaried jobs are so attractive they'd skip YC.
There's nothing wrong with those people! But the whole point of startups is to capitalize on timely combinations of risk tolerance and talent.
Can you imagine Larry Page and Sergey Brin taking Backrub to YC, had it existed, in 1997? It was their first startup. Am I saying they obviously would have? No. But I wouldn't have been surprised.
