Full disclosure: we have two. We got them because we thought it had the makings of a cute tradition (when we were actively cultivating tradition because both me and my wife have peril-fraught holiday backgrounds) but we got two because we thought the extant legend was creepy AF.
Our elves (a boy and a girl) definitely appear in different places every night. They play with my daughter's stuff. They showed up when she was two, I think, and she was informed that they work for santa - no naughty/nice/ratting-out verbiage was added. She's turned them into houseguests, effectively - she writes them notes, she gets them cookies and candy, and occasionally they ask for her to make art projects or roast marshmallows for them. What we've ended up with, really, is a pair of convivial brownies that show up for an extended visit when we get a Christmas tree.
But I definitely see the objections.
From the linked Atlantic article:
An object that disappears and reappears is wonderfully fun—but it doesn't have to be something from a store or someone else's imagination, much less a committee's. If you have an Elf, make up your own story about what he's doing in your house—the weirder the better. Do not like him on Facebook. Do not use him to bully your child into thinking that good behavior equals gifts—if Christmas means anything religious to you at all, isn't it that goodness is its own gift?