One way to look at it is that some of Sesame Street's merchandise (coloring books, story books, etc) does a decent enough job of teaching kids to read and think creatively. All the show would need to do is make the kids love the characters (for this generation, that's Elmo) enough to make their parents buy them Sesame Street-related books. It's still edutainment.
Maybe I was too young to comprehend my intellectual growth, but I don't recall learning a whole lot from Sesame Street. I learned more from Squrae One, Where on Earth is Carmen Sandiego, and Mr. Rogers. My memories of Sesame Street are more about learning social nuances, not academic lessons. (Sharing, friendship, politeness, etc.) This is an important enough lesson on its own, and from what little I've seen of SS lately, that is still a big part of the show.
My sister has a 1 1/2 year old son who is shown SS on-demand. These are chopped-up, distilled versions of SS episodes that are more lesson-focused, and potentially more effective to show to kids than a random episode airing in the mornings on the regular PBS station. That could be your ticket right there.