Muppets aren’t really owning that area very well. It was always obvious that it was leftover from the backlot, frozen in this “Uh, no it’s not a backlot, it really is New York now… unless it’s not,” halfway space. Adding PizzaRizzo helped, but they removed all the muppety decorations on the back buildings.
MuppetVision is a great attraction, but the “Land” is simply not very good. Monsters will more confidently OWN the land. Putting Monsters in Animation Courtyard would leave this half NY, half backlot problem unsolved.
It all makes sense as long as there’s something else in mind for AC.