If you're talking about people dressed as celebrities/characters, there are definitely more of these "performers" than there used to be. On a typical night, you'll see three or four pairs of showgirls, one really hairy guy with a gut dressed as a showgirl, 3 or 4 Elvi, a couple of KISS characters, an Austin Powers, etc. I don't think it's as much of the city easing vendor licenses as not really being able to do anything. The folks don't actually solicit tips and I've always wondered how many people who take pictures with them know that they're supposed to tip and what the norm is.
As for other types of performers, yes there are also more magicians, contortionists, guitar players, etc. than there used to be, as well. I guess they're making some money at it because I'll go back several months apart and see the same people there.
On the one hand, it has become tacky because there are so many of them now you can't walk 10 feet without seeing one. But then, tacky is a large part of what makes downtown fun.
I actually look at it as a sign of the times in a positive way. While everyone has talked about the downturn in the economy, esp. in LV, I've noticed more people hanging out downtown for the past couple of years. Most nights, there are a lot of people at the FSE. I don't have stats or other hard evidence - just the eyeball test. For all I know, they're locals who realize they can take the family out for a night's entertainment, with two or three bands, the light show, and everything else, for the cost of a couple of drinks for the parents and a couple of photos with "Spongebob" for the kids.