I would liken this more to Google's summer of code or Joel Spolsky's paid summer internship program.

I think it's really hard to compete with Paul and what he's built with YC. Strong following, great set of people and a very difficult set of benefits to match. If you fit the YC profile, I think that's a great path for lots of hackepreneur types.

But, I think there are still "gaps" in the market between YC and other early-stage investment vehicles (angel groups, VCs, etc.)