Good point, but there are still two ways YC could miss good applicants: (1) they present themselves better in some other medium that customers care about, or (2) they don't know how to sell yet, but have an aptitude for learning to sell.
That said, I don't know how the YC application process could be changed to catch either of those situations.
Yes, those two things are correlated, although they are not the same. I imagine based on what pg said that there are startups that are great in every respect except how they present themselves to YC.
Thoughts?