Stab it in the face. Burn it with fire. My response to the idiot children and douchebag adult males in their 20s who use this phrase... Make it bleed until it can't breed.
This is true. I have grudgingly accepted the use of "blog" in everyday speech, Google is a verb now, and there's a wealth of other social overlap between the real and the digital. I'm not even going to say that it's an inherently bad thing - new things need new words to describe them. But "yolo" isn't a new thing, it's a philosophy that's been around for centuries, and unfortunately for the current acronym it's been used and abused by idiots until the original intent is no longer recognizable - it's not even worth using sarcastically. All languages evolve, not just English, that doesn't mean it's okay to infect it with web-based detritus. Bottom line, you may be the smartest person on earth, but say "yolo" to me and I will tell you point-blank how many different kinds of an idiot you sound.
This discussion of YOLO has reminded me how sometimes I look and the world and think: Wow, Idiocracy is one of the most prophetic movies I have ever seen.
Tweaked the OP slightly, since I'm not sure my point was as clear before. Mentioning the whole carpe diem thing is just meant to provide for people who really feel like they need a phrase for "live every day to the fullest" - an alternative that doesn't sound like you've been lobotomized by pop culture.