I agree with this sentiment. I have found that with a little big of economics I've been able to pick out successes much easier than large VC firms.
It almost seems as if many of these firms are throwing money away without even thinking over the 101 level business requirements: expenses, revenues, growth rate, 2nd derivative growth rate, market size, profit per employee etc.
Why do you assume that VCs don't know this rather than assume that the market creates forces which make them not care?
I'd guess there is more money floating around than there are startups which meet all the metrics. Thus there's investment in riskier ventures (remember it doesn't matter if any startup succeeds as long as the fund comes out on top as a whole). Moreover startups which do have all these metrics may have many competing VCs which in turn lowers the return for the VC.
It almost seems as if many of these firms are throwing money away without even thinking over the 101 level business requirements: expenses, revenues, growth rate, 2nd derivative growth rate, market size, profit per employee etc.