Hmmm, in the Architecture (Building) world we've had standardized contracts for over a century. They work quite well at a cost of about $5 apiece. I can see how the author, being a lawyer, is concerned by the need of fewer lawyers with standardized contracts in the startup world.
IANAL, but I believe he is referring to the downsides of a standard form contract. The courts have put some limitations on such contracts, because one side gets to dictate the terms, and the other side cannot negotiate; he can only sign it or go home.
That said, I'm sure YC is going to make a fair contract. It's in their best interests for the startup to suceed, after all.
