Little Bird intrigues me. He's all over the merchandise and has almost always been, yet is a character barely used since the early days of the show. Sure, you could see the "Casa" skit well into the 90's, but even I can't remember seeing Little Bird being used in anything much else off the top of my head.
And yet, you saw Little Bird represented well up into the 00's on books and toys and stuff. Who can forget this PVC?
Made well into the 80's, I'd say.
Not to mention
this one from 98.
I'd tend to think there was potential for him to be a sidekick of some sorts, then we got a bigger one in Snuffy. So, like most of the older characters on the series, the writers just didn't find the voice for the character, and phased him out. Shame, really.