For the record I haven't seen this episode and in the context of the show I may have a different opinion, but based on what the OP said - I don't think I have a problem with the word lame being used (although I agree, that doesn't seem like something Telly would say anyway), I'm more discouraged that Sesame Street would have a character -human or Muppet - say something derogative about someone else or someone else's ideas. Meaning that Telly thought so little of Chris' interpretation that he felt he needed to insult him. That to me seems the opposite of Sesame Street's overall message of acceptance and harmony among everybody who lives on the Street. Now if Oscar had said it I probably would have laughed. But overall I don't have an objection to using slang on kid's shows, especially Sesame Street. Often slang is cultural and therefore more representative to real life. I'm pretty sure I can recall David saying things like "jive", "hip" or maybe even Roosevelt Franklin. As long as the word isn't a curse word or offensive (of course that's subjective), I'm ok with it.