It's not just nostalgia!
Yes, I grew up in the 70s with the original muppeteers.
I don't, however, hate the new muppeteers; I rather like Zoe and Rosita; Baby Bear, on the whole, bothers me only slightly. Yes, I don't like Elmo at all - even though my son does (though he seems to be growing out of it)
As a former puppeteer, I have an idea of what current SS is up against, though - and a lot of what you adults are talking about is a sign of the times we live in. Most of that adult-oriented humor was very physical (Grover falling down, people having food fights) or spoofs of adult shows. Unfortunately, parents are extremely sensitive about what their kids watch nowadays, and I'm sure a lot of the "adult" humor has been removed because the producers don't like to be faced with phalanxes of complaining parents. Remember, Henson pretty much had carte blanche because the concept of the show was so new in the 70s.
I remember doing a Hansel and Gretel show that had treating your siblings with kindness as its main moral lesson; achieved by Hansel calling Gretel "stupid," and then acknowledging her heroism and apologising at the end. We got complaints and letters for months about the use of that word (not even an expletive!) I can imagine that SS faces this kind of pressure exponentially, and that the parents don't bother going to them - they probably go to the funders directly. It's got to be difficult to manage dissatisfied parents when they can hit you in the pocketbook.
Now that I'm a parent, I can say with certainty that if you TALK to your kid, you CAN expect your children to learn APPROPRIATE behavior from bad examples, and not the other way around!
Also, having done re-mounts, I can testify to how awful it is to have to live up to other people's standards without giving your characters time to live and grow on their own. It takes time to round out a character; it's hard to develop one on the fly.
I also do think, though, that with the huge losses that SS has faced over the years, they haven't really come up with strong leadership. Kevin Clash is certainly very talented, but I think he's working against type - his other characters, like Benny and Hoots, seem more well-rounded to me. Elmo's World is certainly educational, but it isn't the shared experience that SS used to be.