If Santa Claus is an allegory for God, and the Elf on a Shelf is a proxy for Santa, then the elf is an agent of a higher power that monitors your behavior in order to render judgment.

Whether or not this is good or bad depends on implementation. Ideally, the elf would be used as a temporary training aid and a visible reminder, reinforcing a moral code that the child should follow at all times, especially when no one is watching.

Unfortunately, the temporary seems to have been lost, and now the young believe they need an actual minder as they themselves are unable to maintain an acceptable moral standard.

Goes for those horrible GPS stalkers too. Either a kid has earned the ability to move about unsupervised or not.

Same. I never liked 'em from the start. I was a kid when they were first being sold and I remember getting into a few rows with my sister and brother-in-law when they started using them for their kids. This was right in the middle of the Iraq/Afghanistan wars and I was aware of and leery of government surveillance even at that age so the parallels seemed obvious to me.

I'll get answers like "they need to believe in something magical.

I never heard that argument, but as to that, we already have Santa. In fact, his presence is quite apparent every Christmas.