The problem isn't really whether or not the YC partners are good investors, it's really more of a question if they know something that the startups aren't telling everyone.
Early investment by any of the YC partners after a startup has been accepted to YC could give the impression that the YC partners may be doing some sort of insider trading based on the meetings that they had with the company. That probably isn't an issue at all, but the perception is there.
I don't really understand the issue with that perception, cause surely it is true that YC partners have the inside scoop. Isn't that the wonderful deal of being involved with YC in any capacity? I don't see what the "insider trading" part of the deal is. To me it just makes common sense that YC partners reap the rewards of the clamour that exists for people to get into the system.
I think I might just be missing the point entirely. We are not talking about publicly listed companies, so if you're smart enough to have fashioned a position as a YC-partner for yourself, then kudos to you and surely that just challenges external investors to get better at picking YC winners even earlier.
It's in YC's best interest for every company accepted by them to succeed and get funding. When a YC partner funds startup A instead of startup B, the perception(which, again, probably is not reality) is that startup A has something better than the ones that aren't funded. So it puts startup B in a disadvantaged position from startup A.
It's a question of information asymmetry. You think that "given time," the system, whatever you mean by that, will equalize, but the essay describes difficulties in funding for those without separate investments by YC partners. That seems kind of like evidence of a signal they're trying to remove with this policy.
The interest of the individual YC partner (in this case) through a direct investment in the "best" ones, is not offset by the interest of YC as a whole (and those YC partners through their interests in YC as an entire entity) which would prefer investment in all their companies, or at least not providing a negative signal to those they choose not to invest in.
Early investment by any of the YC partners after a startup has been accepted to YC could give the impression that the YC partners may be doing some sort of insider trading based on the meetings that they had with the company. That probably isn't an issue at all, but the perception is there.