This leads us to the "mean" bus driver Mrs Grunion and why she failed to be an antagonist with staying power: she peaked too early. You see, what happens is that Mike stupidly passes on the idea to create Super Teddy and have Liz fling him at the range of short-tempered and judgmental idiots that people the strip and, hey, presto, the lady behind the wheel of the vehicle is the heavy in a twisted story about the evils of peer pressure when Christopher and Dawn dare Liz to huck the toy at the old basilisk who then lives up to her promise to confiscate the toy. We then get a reminder that Liz has assimilated her idiot mother's belief that admitting blame means permanent humiliation and a by-the-good-back chat by Grunion about being one's own person. This tended to defuse the threat prematurely and what's more, Lynn seemed to realize it.
This, I think, lead her to realize that the best foil for Elizabeth is not an Elly surrogate like Mrs Grunion. She seems to have picked up on the fact that Elizabeth is rather pliable and insecure so instead of of having someone baffle her by seeing a potential she does not, the best way to put conflict in Elizabeth's life is to insert someone who'd use her peer pressure power to make Elly's life difficult.