I thought the fact that they’re neuter is what makes it funny. Mind you, Statler and Waldorf would have been even funnier, if less recognizable from behind.
Anyway, it’s cute as a passing gag. Although I agree that it takes liberties that need not have been taken, it’s certainly not worth any energetic outrage and it’s hardly shattered my childhood innocence or anything.*
I saw a new “People in your Neighborhood” segment for Sesame Street last week and Murray Monster did the song as a rap. Now that shattered my childhood innocence.
It was considered pretty amusing by most people here too. To the best of my recollection, no one but Jerry Falwell seemed concerned about Tinky Winky’s sexual orientation. A quick Google turns up plenty of people making fun of Falwell for this, but I’m not seeing any American public figures who agreed with him.