While it's very nice of YC to send a detailed rejection email stating actual reasons, the reasons themselves don't seem very strong.

Isn't it true of any project at an early stage that it could, in theory, be wiped out by a well executed competing offer from an existing player?

Would Youtube exist if Google Video didn't suck? Github / Google Code? Whatsapp / Google Hangouts?

What prevented Github from inventing Docker? or any big tech company from inventing Dropbox? (etc.)