EW works on the same shoddy "principle" that the Baby Einstine videos work on. Clearly this is only "educational" if you believe a one year old can absorb and process information. They can't. It's pure candy for the kids. They only like Elmo's world because it's Elmo's world.
They could improve on the formula at any given point, but somehow they think this is the one aspect of the show they can't do too much about, even if they want to. It's become a double edged sword now. We either have it and the kids are happy and the fans aren't or vice versa. It's not as easy as it looks, and I think they really want to break free from it.
If they did an entire season without EW, it would bother the older audience of children, but the younger audience wouldn't care, since this is the first time they've been exposed to it. It's a nice experiment, too bad it didn't turn out well.