I really like the steelman interpretation. I suspect that often times, PG's trying to express some sort of core idea, but readers bring their own context with it, and apply it to something else, in this case, YC. And in a different thread, interviews.

But if one were to find oneself in a situation where there are no gatekeeper tests, then how would you go about doing great work? And by being able to see it as an idealism, at least we have a target to shoot for, even if we might fall short in practice.