I'm not going to get into the history of audience uproar over allegedly sexual content on television, I'm just going to say this: Katy Perry is cute. She looks cute in that outfit, which is apparently a make-believe wedding dress (notice the white tiera). She's not naked, she's not acting vulgar, and she's not espousing some subversive propaganda. She's an attractive singer singing an asexual song with a puppet about being fickle. Parents may find that of prurient interest, but I guarantee anyone still young enough to un-ironically watch Sesame Street isn't going to notice or care about how low-cut her dress is. There was a segment three years ago featuring Tina Fey dressed like a pirate. That was also of prurient interest to this particular parent, but that doesn't mean I'm going to write in to complain.
When I was six years old, I was forced everyday at four o'clock to make a major decision. From 4:00-5:00pm, I was allowed to watch an hour of television. But 30 minutes of that had to be Sesame Street. Which means that every single weekday, I had to Sophie's choose between watching He-Man and the Masters of the Universe at 4 or watching GI Joe at 4:30. I was certainly into girls at that young age, thanks to Mia Sara in Ferris Bueller's Day Off and Bebe Neuwirth in Cheers. But I still would have chosen watching He-Man toss a boulder at Skeletor versus watching Madonna (the 80s equivalent of Perry) chase Grover around Sesame Street in a low-cut dress.
Today, I'd rather watch She-Ra toss a boulder at Skelator, but that's because I'm a grownup. Point being, kids do notice this stuff, but it's the parents that teach them that it's of paramount importance, or that it's dirty or wrong and something to be ashamed of. Absent any actual objectionable content, it appears that Katy Perry has been (partially?) edited out of Sesame Street for being too (to quote Zoolander) ridiculously good looking. Apparently, the monster at the end of this story is... us.