Looking at the page and editing history for Blue Bird, I feel I should have clicked on the sourced link, as the page previously only mentioned a little of what Rick Lyon said about Blue Bird. Though the whole quote has been there for months.
Back when I only knew of him being dropped because the segments were expensive, I thought that made sense, while also sensing something wrong with that info. Like, couldn't they have made them less expensive (and since the fans couldn't see the segments, we didn't exactly know what made them so expensive)? They were too expensive to do on a regular basis, but many of the recurring segments have only had one or two installments a season, with some going years before the next installment of the recurring segment (Monsterpiece Theater initially had one new segment every few seasons, only doing them on a more regular basis per season after a bit of a back catalogue had been produced). And couldn't they have repeated the segments in multiple episodes to help recoup their expenses (is "recoup" the right term here?)? The second one seems like it could have easily been repeated (and I feel this first one could have also been repeated, if they reshot the wrap-around scenes). But I guess maybe they didn't want to create a fan base for a dropped character by repeating the segments (though there are plenty of characters with only a small number of segments whose segments were often repeated for years - Sinister Sam, Bad Bart, How Now Brown, Little Jerry and the Monotones, etc.).
But the other info does make sense. As I was watching the first one, I did think it seemed odd for a Sesame Street segment to show a bad guy getting defeated like that (though I guess it's not too different from Huxley's defeat in Elmo in Grouchland). And maybe it's just me, but I feel the segment was kind of long for a classic segment (though I didn't keep track of the run time). I wonder if it would have been better to have an entire street story revolve around Big Bird writing a Blue Bird adventure (though that might have been a lot more expensive).