I have offered to pay the student's legal fees in exchange for putting the GitHub repository back up, with the provision of reviewing the contracts he signed with you to ensure there is no terms that he could be violating, after review with my own lawyers.
I was also considering working for your company when considering changing forms, but I never would after hearing about this episode.
Your remarks about "YC shouldn't fund copycats" are especially ironic given that Repl.it is by far not the first company to make programming online easy to do. I was involved in acquisition of Cloud9.io (now AWS Cloud9 IDE – the original site has been taken down from the Wayback Machine but you can see plenty of their work in articles if you search Google: https://www.google.com/search?q=cloud9+io+startup ) – they provided an online IDE, terminal, full Linux environment, and the ability to program in many different programming languages.
Personally, I don't have an enmity against copying. If you copy what another company does and execute better, that's progress. Amazon.com was just the Sears catalog with a website and faster shipping. But it's sadly ironic that you have this negative view against idea-copying while your own company is dense in a space of competitors that offer online code editing and evaluation – some of which have already exited, as I mentioned above.