This works out well for all parties. There are a lot of people out there who are in love with the idea of working on a startup more than they have passion to make their particular vision a reality. And YC realizes that they're basically playing a numbers game, and so they need to get more meat for the grist--both to boost profits and for the network effects of the YC brand/experience. At the dirt cheap prices they pay for equity, it's a no brainier.
Ooh, that's harsh. But I don't think that's the case at all, as that would be playing the short con. Too much of that and YC's brand will erode. The network-effect can carry companies pretty far but not far enough - they need to find companies with true intrinsic potential, so I don't think they're trying to take more risk at this point.
