I think the answer is that there is a difference between stopping an action because you meet eyes with a picture of a deceased tzaddik and feel that the tzaddik is watching and judging you, on the one hand, and the story with Yosef about to sin with the wife of Potifar, on the other.
The gemara in Sotah 36b reads:
We can read this midrash literally or figuratively. (I would prefer figurative as the intended meaning, not because of reluctance to believe in miracles or that Chazal believed in miracles, but rather because, among other reasons the figurative, metaphorical meaning is so readily apparent from within the text.) Literally, this would seem to be a supernatural occurrence in which his live father's image literally appeared to him and spoke to him. If so, this would have no bearing on imagining that a picture of a dead person can see you and judge you.בראשית לט) ותתפשהו בבגדו לאמר וגו' באותה שעה באתה דיוקנו של אביו ונראתה לו בחלון אמר לו יוסף עתידין אחיך שיכתבו על אבני אפוד ואתה ביניהם רצונך שימחה שמך מביניהם ותקרא רועה זונותAnd she caught him by his garment, saying etc. At that moment his father's image came and appeared to him through the window and said: 'Joseph, thy brothers will have their names inscribed upon the stones of the ephod and thine amongst theirs; is it thy wish to have thy name expunged from amongst theirs and be called an associate of harlots?'
Since the image appeared in a window, it seems quite possible that the idea of the midrash was that Yosef was looking at his own reflection, and Yosef looked like his father. While they did not have glass windows in ancient Egypt, the Roman's did include glass windows in their architecture about 100 CE, which would be in time for this midrash to be created. (If it is from the academy of Rabbi Yishmael, where Rabbi Yishmael lived about that time.) And that would be why he saw his father's image in the chalon.
Or it does not have to even be a reflection, but just an apparition worked up by his own psyche, reminding him of something important.
Regardless, this image of his father did not "tell" him: "I am looking at you! Feel guilty, and imagine that my picture is looking at you."
Rather, his father's image told him: "Joseph, thy brothers will have their names inscribed upon the stones of the ephod and thine amongst theirs; is it thy wish to have thy name expunged from amongst theirs and be called an associate of harlots?"
This can perhaps be understood as introspection, and realizing exactly who he was. Here was a prince, one of the shivtei kah, who had been reduced to slavery. And in this lowly position, he was being tempted to do a lowly act, of adultery. He now sees his father's image, and recalls where he comes from and who he is. With whom should he associate? He is an associate of the other brothers, whose names will be inscribed on the ephod. He is not an associate of harlots.
This is different from hanging up a picture and then believing that the deceased person in the picture, rather than Hashem, is looking at you and judging you.
I agree that there are similarities between the midrash about Yosef and the message of the video. Yosef's father's image shocked him, and reminded him not to sin. And here, in the video, as I wrote in my comment, "the fellow was reminded by the presence of the saintly individual what he should be doing." And the video was very cute in this regard, and in its presentation.
But at the same time, there was a theologically troubling undercurrent, which was brought to the fore, and stressed, in the message in the video. If one really believes that the Rabbi in a picture is somehow present and watching, and that the Rabbi watching is more important that the Omnipresent watching, then Rebbe pictures seem to me more problematic to me than a having a doll for children, where some of the same people deface the doll's face.
As I wrote in my comment there:
One response given there that Rambam is wrong, superstition is good, and the tzaddik as well as all sorts of angels and demons actually are in the room -- make me even more concerned that the picture could have some sort of pesel status. A dismissive response --that this was all not intended literally, or highlighted a psychological effect which does not accord with theological reality -- would have had more of a quieting effect on me.
"But at the same time, that picture of a basar vadam was hanging in his room, and he felt like the tzaddik was actually there, in some sense, able to see him and judge him. But in Tehillim, we read: פֶּה-לָהֶם, וְלֹא יְדַבֵּרוּ; עֵינַיִם לָהֶם, וְלֹא יִרְאוּ.
They have eyes, but they do not see. Yet this video is called "Ayin Roeh." Yes, there is a concept of ayin roeh in Judaism, but it is specifically that Hashem is watching. Thus, we have in Pirkei Avos:
הסתכל בשלושה דברים ואין אתה בא לידי עבירה דע מה למעלה ממך עין רואה ואוזן שומעת וכל מעשיך בספר נכתבין.
This refers to the watchful eye of God, not the watchful eye of Baba Sali."
That is my take on it. But others are certainly free to have their own take.