I mean, kinda-sorta.
Less episodes, yes. There's no need to scramble and create new characters to fill 130 episodes worth of material, because A. they don't need to work as much and B. they have access the good characters (Ernie, bert, Cookie, Grover, etc.) they couldn't get outside of insert pieces.
Street stories are certainly not longer; they're shorter than ever, running between like 7-10 minutes, whereas they could be maybe twice that just a few years ago.
It really boils down to the fact that they're focusing on the certain characters (Elmo, Cookie and Abby seem like the main ones now, while like Big Bird, Oscar, Rosita, Grover, E&B are secondary, everyone else is just supporting cast). Kids like these characters the most, therefore it makes sense to ensure they're in the show every day - hence the main three being the ones with their own segments outside the story (that includes the letter/number of the day songs). Less time in the show means no space for a Baby Bear sketch or Telly song (though I see no reason why they can't do these; it seems the only new sketches/songs are celebrity ones. I'd take an E&B bit about "R is for Robots" or whatever over these films).