As a parent who came back to the show when the little ones came along, I have no problem with the show staying "modern." I don't yearn for old clips--they were new back in my day, so why on earth wouldn't it make sense for there to be similarly new clips for today's kids? Having fond memories of the past doesn't mean I have to live there, thus stifiling opportunites to appreciate what can be equally creative today.
They hit paydirt with Elmo, and good for them. I don't care in the least how quickly he joined the ranks of the other characters--if it works, it works, and there's no reason to enforce some arbitrary timeline that a new character can't be important because some old timers can't get past the way things used to be. My version didn't have Elmo, my kids' version does. My hope is that there is a version for their kids someday, regardless of what characters come and go in the interim.