"In order to justify the show’s hyperbolic take on late-night sketch comedy as the epicenter of America’s perpetually boiling culture war, the show-within-a-show would need to cross-pollinate Saturday Night Live at its zeitgeist-capturing best with the ballsy, timely, politically engaged satire of The Daily Show and The Colbert Report. Alas, judging by the glimpses of sketches viewers had the misfortune to see, the show was more like MAD TV on an off week, a regrettable collision of shameless mugging, broad comedy, and parodies of celebrities (Holly Hunter, Juliette Lewis) who haven’t been culturally relevant or well-known enough to make for good satirical fodder in decades. Studio 60 had all manner of problems, but setting the bar for its sketches impossibly high certainly didn’t help."Someone in the comments makes the interesting point that if you're with the show by the time the sketches actually appear, somewhere in episode three, your suspension of disbelief accepts that the sketches are brilliant within the diegesis of the show because the characters believe they are. Even though for most of the time they're not.
Personally, I accepted them because most of the time these kinds of late night shows tend to be relatively patchy and repetitive anyway (even in the UK). Plus Sarah Poulson's impressions are so uncanny, they are genuinely funny despite their lack of relevance. Also in some episodes, especially later in the season, the sketches aren't supposed to work because the writers have lost the plot.