While YC represents the cream of the crop, it's probably most attractive to aspiring founders who want to carve the path of least resistance to success.
The hard truth is that YC's format makes it the most useful for teams that have the best ability to leverage the strengths of its networks and advice. Technically savvy, with obsessive work ethic and the ability to iterate quickly and constantly.
The response was apt, others were a better fit. None of their reasoning should be interpreted as your team, demo, or product won't be successful.
Best of luck to all of you!