You're making the right points but drawing the wrong conclusions from them. Yes, users need to be your highest priority, yes you need to have the drive to succeed that is reflected here by not relying on Y Combinator to be your ticket to wealth, Yes you need to get out there and actually DO; actually BUILD. But these are precisely the kinds of people and ideas that y combinator IS GOING TO PICK.
The fact is that Paul Graham says these same points time and time again in his own essays, and so anyone that is applying to y combinator without these things in mind is obviously not very bright. But your conclusion is not very bright either. Someone who really had all the qualities you describe would recognize that while y combinator doesn't mean success or failure, it provides a number of extremely valuable resources (of which money is only one of, and not #1 of, the list). I certainly wouldn't want my competitors to be in a y combinator group that I was rejected from -- that is a bad sign.
To reiterate, good points; bad conclusion.
My first time at news.ycombinator, but i've been reading paul graham's essays for a while now and am increasingly impressed. I'll be back
For more on the money aspect of the decision - see my post on 'Outside Money and Irritable Bowel Syndrome' at http://blog.nanobeepers.com
I also have to agree with the others that the writer of the article kind of missed the point of the environment and guidance that YC provides. But then again, perhaps some of the applicants are only applying because they think they need the money.
My startup initially wasn't going to apply to yCombinator. We have a solid team, a product that I really want to see exist, and we're making steady progress implementing it. But I figured that if we have a decent chance of success without yCombinator, we'll have an even better chance of success with yCombinator. So why not spend 4 days or so putting together an application and see if they accept us?
If they turn us down, fine, we go back to our original plan and keep working on the product. But if they don't, great! It's advice, connections, a set timetable for when I leave my day job and work full-time on the startup (for me, this is a question of when, not if: yCombinator would just make the decision for me), and a cool hacker environment where you get to bounce ideas off other equally-smart people.