But n th Facebook app/game, photosharing, UX/Design nonsensical blogging platform is surely isnt innovation.
The issue is that while Wealth might be a non zero sum game, talent is a zero sum game. More people making crap apps mean lesser people working on meaningful innovation in Healthcare, Energy and Computing.
And this sad trend is started by YC/TC and the likes. Actually all traditional VC firms such as KPCB do fund real innovative companies, e.g. BloomBox