Poor Katy, apparently she isn't Sesame Street approved...
In all honesty, I cannot see a thing wrong with that video. It's nothing worse than kids see on magazine covers, in malls, in schools, on TV, at the beach... you name it, I've seen MUCH worse.
At least she's a good sport about it, here is her tweet on things.
It's alright Katy, the rest of us still love you!