Do you think it is bad that my 20 month old wants to watch elmo all the time?

You're doing the right thing. Kids love elmo, its quite educational to :) i let my daughter watch it, along with dora and all of those cartoons that actually teach them something, my daughter is 2 and she knows her abc's and can count to 13 and knows her colors (most). I work with her and teach her new things daily, she also learns new songs from watching her favorite shows and listening to music, its normal..during winter, its not always a good idea to "take them outside"...so we do things inside, We color, we dance, listen to music, play with blocks to build houses AND watch elmo..lol..you do what you think is best, dont let other people tell you what you should and shouldnt do. OR let them tell you, you are basically a bad mother. elmo is just fine