Direct merchandising of children's cartoons was made illegal in the US in the 60s and was not deregulated until the 80s when Reagan made it possible again.
The breaking point in the 60 was a show called "The Hot Wheels" Hour (or something like that). It was deemed that children would have difficulty telling the difference between narrative and ads. The Reagan administration struck this down.
The first truly merchandised series aimed at kids was Strawberry Shortcake.
As someone who works in the industry, children's programming is not made today where merchandising opportunities are not part of the larger picture. This is not to say that ALL are merchandised, few make the cut, just that all are concieved with merchandising in mind.
Interestingly, my broadcasters recognize that the shows they license (ie commission or acquire) for broadcast are essentially ads for merch. As a result, some broadcasters have cut deals where a, they don't pay for the broadcast license and/or b, get a piece of the merch action.
This is not to say that these shows are neccessarily bad because of merch. It just means that they are more pervasive in our culture than say, Scooby-Doo or Falcon and Dyno-mutt ever would have been in their prime. It means that the nature of children's programming changed.
As for why kids like the classics so much... Nearly all of the classic cartoons were made for adults rather than kids. They were not interested in teaching a lesson (purposfully at least), they never talked down to their audience and they reenacted some of the classic myths and achetypes of all time...
They kept it simple.
The majority of animation today is more along the lines of drama and structured narrative. They are increasingly complex and/or they have an educational purpose.
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