Instead of trying to predict success based on the seeds of an idea and a brief interview, any startup could enter the program and those that prove themselves could move up a ladder that provides more and more opportunity.
The application still asks about educational background, which effectively just a way of asking about familial wealth, but it still seems like a major improvement over existing avenues.
I predict that in the future YC will be viewed as the "do things that don't scale" early effort and Startup School will become the massively world-changing product that results.