I'm not sure if they've ever claimed that its a not-for-profit event in the way you've described. Some of that money goes into the hands of the people organizing the event (who happen to be investors).
I'm not saying it's not for profit, it wouldn't exist if it was non-profit, and of course there is a risk that it could make a loss any given year.
If you are referring to Mike and Jason as investors, then I don't think either invest heavily in companies and I don't think they invest in TC50 companies. There are, I assume, investors at the event and watching the streams who do not get paid to watch and probably even pay to be part of the event. Those people are genuinely interested in making investments on their own merits.
An investor, as far as I am concerned, is interested in seeing the best companies and any barrier that stops them seeing companies, like paying, does not help.
I note that, Y Combinator even pays expenses to companies that come to pitch to them - that is the way it should be done.
