I agree for the most part, but it may well be enough to break through some inertia. 12k for a two man team is 3k/month, whereas in full time work most engineers would be making at least 10k/month. I know personally I'd be uninclined to ditch my entire income, but keeping at least a little trickle coming in would mean my savings wouldn't diminish quite so rapidly, and I'd probably be willing to take two months off to see how far it could accelerate my startup.
The real danger is whether follow-up funding could be found fast enough to have people quit their jobs and maintain the momentum achieved during the two month program.
That's the tradeoff that you make here is that it's not just about the money is it? I don't think YC has ever been about the money for a startup- even at $100K or whatever it is. It's about "access"...into the SV network, which gives you instant credibility to parlay that name into other funding, recruiting, partnerships, etc. So if you are a savvy entrepreneur you can leverage the fellowship in almost the same way as the YC batch.
Maybe this is also a way for YC to sort of draw a line in the sand between wantrepreneurs and the real deal. If you have an idea that keeps you up at night and you have decided to go all in, then this will give you a chance to prove it. no?
The real danger is whether follow-up funding could be found fast enough to have people quit their jobs and maintain the momentum achieved during the two month program.