As for "unrealistic" projects, the thing is - many "unrealistic" projects have long time-horizons, so they need external funding in order to continue. But after some time, the payoffs can be huge. Agencies like DARPA are typically the agencies that fund projects that sound unrealistic, but we need more than just DARPA. And Thiel wants to demonstrate that maybe there are alternative ways of getting long time-horizon projects (like aging prevention) supported.
In the words of Thiel Fellow Laura Deming...
Too often, researchers design quick incremental projects to please grant-making bodies instead of taking on risky, long time horizon problems. With her fund IP Immortal, Laura plans on commercializing anti-aging research, bringing therapies out of the lab and into the market sooner.
I agree that unrealistic projects have long time horizons. They ALSO require lots of people and capital. Starting a NEW, long-term project is NOT a task cut out for a young person--you need connections and experience for it to have a good chance of succeeding.
The candidates who want to work towards these unrealistic goals SHOULD--but they should do so in a way that is more likely to succeed. In this case, a better use of the person and $100K would be giving him a job at SpaceX (which Thiel is an investor in), and using the $100K to hire another person...
http://thielfoundation.org/index.php?option=com_content&view=article&id=15&Itemid=19
Thoughts?
A lot of Thiel's beliefs are in line with those of a significant portion of the LessWrong community, so I trust his judgment more than I trust that of most.