They banned the video because parents complained that Katy Perry's cleavage was inappropriate for Sesame Street.
Katy Perry had sang a cleaned-up version of her song Hot N Cold with Elmo, and it was supposed to air on New Year's Eve.
Elmo wasn't complaining. But it seems a few parents weren't overly impressed with Katy Perry's outfit. According to website TMZ, after some parents started complaining her cleavage was rather too prominent, producers have decided not to air the song. I bet that "Sesame Street" had no idea how the video would go over with the public when it posted the song on its YouTube channel
Here's the video of Katy Perry's appearance on Sesame Street.