The book analogy falls apart here, because only a limited number of people are accepted to YC or TS, while a (practically) unlimited number of people can read Harry Potter. The existence of two YC-like programs doesn't significantly decrease the amount of interest per program, especially since you can apply to both. It does, however, significantly increase (approx double) the number of entrepreneurs funded, and the competition may encourage YC to improve its program further.
As for your book example comment, if somebody wrote Henry Potter, I imagine lots of people would read it. The story in each new Harry Potter book isn't new and exciting either... it's the same story, new details. Also, just because Harry Potter was the most popular series with that story line doesn't mean there's no demand for other similar books.
We don't accept a fixed number of applicants. We'll fund anyone who seems good enough. If we suddenly got 30 great applications, we''d accept them all, and worry later about how to cram them all into our space.
My guess is that we're about to see more YC "copycats" popping up. YC is turning down hundreds of applicants each round, Techstars has at least a couple of hundred applicants for their first round, and those numbers are only going to grow as word spreads about these types of opportunities. Entrepreneurial minds aren't only coming from Boston and the Bay area (and other startup hubs), and they're looking for new opportunities. So, there seems to be a growing market for businesses wanting to help start startups. I think this is pretty exciting.
However, as for your example, why would anyone buy such a book unless it explored new stories or otherwise filled a void in the market?