There's a definitive answer to this question, IMHO: it was 1993, when Season 25 began and the Around the Corner set was added. OK, one could argue Sesame Street lost a bit of its edge when Snuffy was made "real" in 1985. But, to me, the show at that time was still brilliant, although perhaps a bit less brilliant than at its peak in the 1970s.
The years 1990-1992 were "transitional years" for me. Once Joe Raposo and Jim Henson died, you could see some of the changes taking effect (most notably the changing of the theme song in 1992). However, Sesame Street was still putting out some decent material. Then something happened that destroyed children's television forever in 1992... Barney premiered on PBS.
This obviously had a major impact on the producers at Sesame Street, because when Season 25 rolled around, Sesame Street was a completely different show. I remember being excited about Season 25. I read about the changes planned in TV Guide before the season began, and I thought they would be good for the show.
Then I tuned in to those first few Season 25 episodes, and I literally remember thinking, "*** is this junk?!?" The show had become instantly "Barnified": the music became saccharine and annoying. New, soulless, aggravating characters like Zoe were introduced and got prime air time. Worst of all, one of the hallmarks of Sesame Street was eliminated: spontaneous conversations/interactions between the kids and the adults were all but eliminated. There was now an increased reliance on child actors, and almost all dialogue was now scripted. Jon Stone fought tooth and nail against these changes, but lost the battle in the end. (Michael Davis' book Street Gang describes this metamorphosis of Sesame Street wonderfully.)
So, even though I still watch Sesame Street occasionally just to see what changes from season to season, the show really lost me in that 25th season. It's a shame, because I consider the Sesame Street that existed from 1969 until 1990 to be the greatest television show of all time.