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C'mon, Video Dog, get your facts straight -- at least listen to the first few seconds of the audio. Unless toddlers are now having infants of their own, the video's audience is parents who want to communicate with pre-verbal children.
The video is probably intended to be used much as the group parent/kid scenes in the video are set up, with adults and kids learning a few ASL signs together. It's not insulting or disturbing to parents or kids.
In fact, the whole setup is no more scary than storytime at the library. Mimic the Monkey isn't any weirder than a "live" Minnie Mouse at Disneyland or Barney on TV. You may not like Mimic, J.D., but the kids in the video aren't creeped out.
Lucky Achiever is right that ASL is a complete language, and this video tries to teach only a few isolated signs. However, it's hard to argue with helping children learn language, just as it's hard to argue with helping parents of infants communicate with their children more easily. Let 'em learn some signs. What's the harm?
For more information about American Sign Language, see www.gallaudet.edu or http://clerccenter.gallaudet.edu/. I'm not affiliated with either entity.