No, founders are accepting the amount of funding VCs give them. I don't love VCs, but it's weird to blame them for this phenomenon. The VC model can't work differently. Most companies fail, and the winners have to pay for the losers.
I am not blaming VCs, I am blaming founders for taking VC money when the model they are giving it to you under is fundamentally flawed.
It is debatable if VC model couldn't be made to work better, but if this is how they are going to play the game then you are better off not playing and get on with bootstrapping.
But the model isn't fundamentally flawed. Many founders just want to apply it in situations where it doesn't work. VC money is useful when you have a scalable, winner-take-all market that requires a large amount of capital to build out a viable product that you can monetize. If any of those clauses don't apply - the market is not scalable, the market is not winner-take-all, or the capital requirements for monetization are not large - a founder should not take VC. (Strangely, VCs are much better at telling founders when the VC model doesn't apply: many will outright refuse to fund companies that don't meet these qualifications.)
But for founders who are attacking markets with those characteristics - the existence of VC is a huge boon that can accelerate what would normally be a lifetime process (eg. Walmart, Microsoft) into a decade or less (Google, Facebook).
