In the interest of full disclosure, I know (again, from my daughter's research and paper) that Mr. Potato Head was a nationwide craze for a couple of years.
There were a Mrs. Potato Head (had one), a couple of potato kids (one, I remember, was "Spud"), and a couple of potato pets that followed him as a result of his success. There was even a Mr. Potato Head toy travel trailer (the vacation-y kind to pull behind a toy car) -- I vaguely remember that from commercials or from a friend's house.
According to several toy history sources, the first TV commercial for a toy was for Mr. Potato Head -- although while earning her degree at Silly Putty University (www.sillyputty.com), my daughter watched a REALLY old commercial for Silly Putty that I'd bet gives Mr. Potato Head a run for his money.
Also, Mr. Potato Head was, according to the THOF, the only licensed toy in the movie, Toy Story.
I guess it is iconic and has lasted for several generations, two of the criteria. I just don't see that it changed the way toys were made, or that children learn (at least not in any significant way) from playing with it.
When I match Mr. Potato Head against marbles, bicycles, Monopoly, Tinkertoys, rollerskates, etc., I don't see him being one of 34 toys of ALL TIME deserving of the special recognition. Obviously, I've spent too much time thinking about this over the last three months -- but we have a tendency to get fully immersed in the kids' annual Social Sciences project at the Scoutmaster household.
Again, I'm proud to be a tuberphobe. Mr. Potato Head has no business in the Toy Hall of Fame. It's time somebody took a stand against underserving tubers.
Didn't Mr. Potato head come out in a plastic version with the holes already there? I seem to recall getting one of the "modern" ones as a kid and thinking "what's the point?"