Softbank aren't really doing this any more though. They are making very large bets on relatively few companies. Their vision fund 1 was something like 100 billion spread between about 100 companies, so 1 billion each. This is rather different than the usual VC. It's hard to get data, but most data suggest smaller rounds have better success [1].
Due to the power law distribution of startup outcomes, the "expected value" of the "average" (mean) startup is infinity (assuming there are infinite startups). This means YC's model to invest a modest amount in as many startups as possible is the rational strategy. Even the tiniest percentage of equity in infinite companies yields infinite returns.
This seems as counter-intuitive as saying "superconductors have zero resistance". It makes people think you meant to say "nearly zero resistance" or "approaches zero resistance".
But both cases are true - the power law distribution really does tell us that the expected return is actually infinite and superconductors really do have zero resistance (up to the critical current limit).
Is a small number of people with huge amounts of money investing in things nobody wants better than lots of people with small amounts of money investing in things they want?