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I very reluctantly (reluctantly because pg is very kind to have any kind of seed funding program or startup school at all) have to agree with your post. A nicer way of putting it is, "we're not going to go against our #1 rule about not having startups because that would make us look bad, unless rejecting a single founder would make us look even worse." In other words, YCombinator doesn't want to prove themselves wrong except when the case is such that rejecting a clear super-star would make them look even more wrong. But that doesn't mean there aren't good reasons.

I think the idealistic idea that people should move to Silicon Valley, meet other smart people, live near smart VC's, and then start with some funding and multiple founders is excellent advice; however, it doesn't seem fair to reject those 20 year old single founders who already started as single founders, and who are fine having users instead of cofounders, because they feel they're months away from success, don't know anybody who is a worthy programmer and don't have time to look, and don't know any good VC's and don't have time to look. In fact, the whole reason single founders apply to YC is so they could move to Silicon Valley, meet other smart people, live near smart VC's, and more...

However, being a solo founder for a long time could mean the founder may not take YCombinator advice as well as multiple founders might (in which case, neither of whom may have much of a leg up or time invested in the project, and would be willing to do whatever pg says, making pg's job easier.) In general, I believe that having multiple founders makes lives better for the startup, for the users, and for investors.

I'm not sure what, if anything, can be done differently, except to take those hackers who've tried doing a startup for years without the benefit of the Valley, put them together in a room, and try to do new projects together. But if you're going to do that, you might as well take some people who apply as a group and have some experience working with each other already, versus a bunch of people used to doing things on their own and their own way.

And the bigger question would be, why would solo founders want to work on a different project, anyway? And if they were to do the same project they're already working on, where would they get a founder or employee, or would they be willing to?

I guess that's where Startup School comes in--to put a bunch of people interested in starting up together in one room, in Silicon Valley, with VC's presenting, to show them that there are definitely others out there who they could work together with, regardless of their luck finding such people back home, and that Silicon Valley is as nice to live in as it is famed for new technology.