I LOVE Elvis's version of "Don't Think Twice"! Thanks for pointing that out. Señor is one my favorite Dylan tunes of all time. What can I say? You're...well, just wrong. To be honest, it's hard to really know what the Beatles and others were thinking in terms of where they wanted to go. However, if their recordings are any indication, Dylan was a critically important influence. In my opinion, his influence was almost universally a great thing. I think the Beatles and the Stones became MUCH more interesting after Dylan's innovations became apparent.
Glad you liked Don't Think Twice, how 'bout Tomorrow is a Long Time? Bob's reputed to have said it was his favorite, but then he's been known to say a lot of things, e.g. he once said the Smokey Robinson was "America's greatest living poet" and then when asked about that later he said 'no, what was I thinking, I meant Rambeau' (who's neither living nor American, so I guess he just didn't want to talk about it). On the broader issue of Bob's influence and whether that was a good thing - there's good ambivalent and BS ambivalent, Like Justice Stevens I can't define it but I know it when I see/hear it.