I don't endorse shutting down the Muppets, or any attraction, just because it's getting a bit long in the teeth, unless a replacement is ready to go.
Having said that, an attraction can overstay its welcome. I found Sounds Dangerous to be flat out embarrassing at the end. Starting with the pre-show trivia about ABC shows that last aired a decade ago, to the attraction itself, I really felt it should have simply been closed, despite the lack of capacity in the Studios park.
The Muppets is borderline. It's still enjoyable, but the story about "new" 3D technology is terribly outdated, and the 3D in the film is far below modern standards.
It's a great theater and they could so so much with the Muppets. What about a Star Tours type scenario where you see different sketches each time? Do a Philharmagic parody where the Muppets take on classic Disney films.
I love the Muppets, and while I appreciate the significance of it being Jim Henson's final work, I'd like to see this attraction revamped.