I always figured they could have mentioned David's death on the show, and everything still would have turned out okay. It could have had Big Bird and Elmo coming into the store to Order something, and they could ask Gina where David is, that they haven't seen him around lately. Gina could explain to both of them that David had died. Big Bird would understand right away, because he remembers when Mr. Hooper died. Elmo however would have questions about it, asking if there was any way they could bring David back. With help and support from both Gina and Big Bird, Elmo would slowly begin to realize that David wasn't coming back. It would be sad, that's true, but neccasary. If you think about it. Although they had already adressed death on the show before, it was in 1983 and David died in 1990 so therefore a whole new group of Youngsters were then watching the show religiously. I don't think a goodbye David episode would have hurt one bit.