Muppets aside, what's wrong with that? Of there is indeed a new show to replace muppets, plus a new D ticket attraction with 1600-1700 pph, and theming to tie it together, that's a net gain for the Studios.
I'd prefer muppets stay. But if they do have plans for behind AC that they couldn't fit anywhere else, I can see why they would do this.
Still, I wonder if it would have been feasible to have the entrance to Monsters just beyond muppets, so you keep Muppets courtyard and everything there, but just build new beyond that.