Why would he apply? He has 1.2m revenue per year, his valuation must be much higher than that, the 30k YC will give him in return for 10%-30% (or whatever it is) is a pittance.
You're forgetting the likely Yuri Milner $150k convertible note, which changes the math somewhat. (If not, we have a "typical case" $14k investment --- n is the number of founders --- for at best 2% post, giving a post valuation of 50*$14k = $700k, which is a very raw deal under the circumstances.)
As to whether this is worth it --- depends on the expenses (which presumably include at least salaries, promotion, and rent). If they aren't spending as much money as they're taking in (no names, but I do know of iPhone devs in this position), it's hard to see the point of giving up equity to get more.
Then again, I think you could consider applying to YC. Even though your revenue > expenses. Don't think of YC as an incubator or a funding machine (or whatever you'd like to call it). They offer a lot more. I think it's more like a ticket to a community of entrepeneurs and investors, based in Silicon Valley.
And yes, the $150k is a nice addition, but would you pick this convertible debt over the weekly dinners, office hours, alumni help you might get and most of all connections with possible investors? I wouldn't :)
Now I think about it: the YC FAQ also mentions this money-related question.
I recall seeing some posts about YC startups trending more in the direction of established companies. But what is more important is whether or not going through YC will help them achieve their goal. If YC helps move from $100k/month to $1m/month it is very much worth it.