Yeah, I'm not buying that. My parents had me watching Sesame Street way before pre-school. The quality was just so much better then than it is now. There was a greater diversity in characters and content. Who was the main character of SS in the early 80's? Big Bird? Bert and Ernie? Grover? There wasn't one. Ask a kid who the leader of SS is today, and I'm betting they'll say Elmo without hesitation. My problem with that is, he's a loopy prima donna who's utilized more as an entertainer with nothing educational to offer. One character, no matter how adorable he is, is way more boring than a large cast of wacky, fun characters in many different settings and scenarios(for a more "adult" example, see NBC's "Joey").
As for puppetry and animation, it seems to me that shows such as Crank Yankers, The Simpsons, and others are doing quite well for themselves among adults. I have a lot of conversations with people my age about the greatness of shows like Family Guy, The Critic and Futurama. Also, anime is becoming more and more popular as its own genre. The problem is, in short, Spongebob Squarepants. Actually, I blame Ren and Stimpy. That show seemed to precede the course, kind of sick sense of humor that cartoons seem to rely on these days (Huh, let's show a close up of this character's butt! Huh huh!) The other problem is showing off. People are so impressed with themselves and the technology they possess that they go out and make extravagantly expensive shows and movies using CGI and there's all this talk about the realism of CGI and it means that classic animation is just being shoved aside.
Ugh. I really didn't mean to rant for a third time. Maybe that will be all from me.