I think the blaime lies within crappy Nick Jr. Toy related Baby shows like Blues Clues, Maisy (the poorly drawn salt rat), etc. Mindless, semi educational drivel that is bland and unappealing to anyone over the age of 3, because work a day parents can't afford to spend time sitting down with kids and teaching them, themselves, greedily trying to get more greedy Me stuff like SUV's. Because of this, younger kids started watching TV, but they didn't get the complexities of any sort of plot nor satire driven characters like Guy Smiley, Sherlock Hemlock, etc. So they watch basically flashy, lame rediculous stuff like Blues Clues, which inspired JTE and Elmo's world. Not to mention all those overpaid child psycologists had to rear in and say that characters shouldn't say "Darn" because it will lead them on the road to swearing, and they shouldn;t throw pies in faces or bang heads, because violence on TV makes little kids want to perform violent acts at home.
You see, Elmo is a scape Goat! If they was no Elmo, some other character would have a part off the show, and people would complain about that.
Don't blame Elmo! Blaime stuffy educators, Psycologists, and latchkey Kid's parents who don't treat kids seriously, and talk down to them...