I don't see why it shouldn't. It's kinda like Saturday Night Live. It's for future generations and it finds its audience there. It goes through tough runs here and there (though SS was never in the same danger of cancellation), but it always makes a big comeback. All they need to do is recast characters when puppeteers are unavailable, and they'll sound different to us, but they won't for younger generations just tuning in. As a preschool show, it takes advantage of the Fleeting Demographic Rule. I'm surprised they don't reuse more older storylines. We'd know, but the target audience wouldn't.
Besides... the sobering fact is, if SS was cancelled, they'd put something far inferior in its place. No one wins.