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.