That's a good question. The main reason is that the hypothetical Huge Wall Street Firm doesn't see a way to reproduce the project at scale. They don't have pg et al, and while YC is applying mass-production techniques to startups, by the standards of markets where APIs exist to conduct transactions they're still in the early industrial revolution.
If pg was just a decision engine for Startup#fund(amount), a vaguely specified API which could put hundreds of millions of dollars to work on any given day and which didn't require artisanal mentorship and connection-making of the fledgling startups, you would expect somebody from Wall Street to already have said "We can offer you an arbitrarily high amount of money to do that for us."
That's basically exactly what Yuri Milner did. He decided that YCombinator did a great job picking startups and mentoring them, and so he would invest $150K into each one that went through the program, effectively freeriding off PG et al's mentorship & decision-making processes while contributing additional capital.
It unfortunately seems not to scale, as making $150K available to otherwise equivalent founders made for worse outcomes, and so the program's been scaled down to $80K or so.
That's a good point - PG is essentially decision engine.
All YC investments are public and some investor could go through and build PG's model using videotapes of all those founders. Collect all this data, put a few data scientists on it, and build a virtual PG.
The connections don't matter if you're a huge fund, you can buy your way to a meeting with Presidents, silicon valley types are puny in comparison.
This is a golden opportunity for oil tycoons (tesla and google are going to be demolishing them in the next few years with electric self-driving cars, they better get in the tech game, and so far PG has been most reliable at it).
If pg was just a decision engine for Startup#fund(amount), a vaguely specified API which could put hundreds of millions of dollars to work on any given day and which didn't require artisanal mentorship and connection-making of the fledgling startups, you would expect somebody from Wall Street to already have said "We can offer you an arbitrarily high amount of money to do that for us."