Well, as a former teacher myself, I'm not sure I'd agree that putting on Cds teaching numbers and letters will hit the spot with a poorly two-year-old. Would you listen to a CD teaching you Russian while you were suffering from 'flu? I bet you wouldn't. You'd want something distracting, soothing and entertaining.Sick children, like all of us, regress when feeling unwell.
No one is suggesting a diet of marshmallow and chips, but there are times when small children need comfort and a bit of gentle, distracting fun. If you are sometimes able to sit and watch with them, snuggling down together, and maybe chatting about and sharing what you're seeing now and then, there's nowt wrong with that - with the exception of offerings like 'Driller Killer' such like, naturally!
Whilst I sympathise in part with some of teacher's points, I think there's far too much emphasis these days on formal education for young children. For a small child, everything is new, everything is a natural learning experience in some way - you don't have to labour the point and make it a chore. By all means read with them and share books, but for the flippin' FUN of them, nothing more.
You're doing exactly the right thing for your little one, KateK. Ignore those who sniff in a holier-than-though manner and carry on doing what your instincts tell you. 