First off in regards to Oscar - he is a Grouch. What does being a grouch mean? Being jaded, beaten down by life's experiences, having developed a thick skin, building walls around one's heart as opposed to wearing it openly on one's sleeve. (Something i can certainly relate to as i get older and life generally worse) A grouch still has a heart underneath it all and deep down would like to show it, but it's going to take a lot of work and time for it to happen. Oscar SHOULD have his nice side whether it's 1970 or 2010. I don't see his character having been that sanitized; if anything i find it refreshing that he's still been able to remain as negative and grumpy and cynical as he has (the one Muppet that would actually refer to Elmo as "the little red menace" just as many of his RL counterparts had been doing)
As per Kermit, when it comes right down to it, we would still be having these debates about Kermit EVEN IF JIM WAS STILL ALIVE AND PERFORMING HIM. Look at how different Kermit was in 1976 on the first season of TMS and just four years later in 1980 on the last season of TMS. The longer characters are in existence, the more they're going to evolve no matter who's playing them.
Some words on the subject from one of the people who knew these characters' souls the best - longtime Muppet head writer Jerry Juhl...from my interview with him about a decade ago:
JUHL: I personally feel Steve's certainly done a wonderful job with Kermit. It's always tricky, hard, and emotional both for the writers and the performers. Even when we decide to do it, the performers may have their own feelings. Ultimately, it depends on the project at the time.
ME: Steve Whitmire really has done an amazing job with Kermit. Also with Ernie.
JUHL: We really allow the performers to make the characters their own and Steve really has made them his own. We would never want a performer to be doing a copycat imitation, it's a true acting job in that sense. Since our comedy is character-based, they can't be static. They need to be able to grow.
ME: One piece of criticism that keeps coming up though is that Whitmire's Kermit is too "passive" and not as excitable as Jim's. Yet this really falls more into the writers' arena as opposed to being a particular fault of Steve's. In the films, Kermit's been playing other characters, Bob Cratchit and Captain Smollet, and on "Muppets Tonight", he's been in the role of executive producer and not on the front lines dealing with all the craziness.
JUHL: That was actually a conscious decision. Brian [Henson] and the writers of "Muppets Tonight" both felt they didn't want Kermit back out front again. Because then there would be the direct one-to-one comparisons between the old show and the new one. The Muppet Show was two decades ago and now we're in a new era and a new generation of comedy. I think the decision to make him the executive producer was a good idea, that seemed to be where Kermit was naturally headed. Then you can have Clifford come crawling to Kermit and Kermit saying, "Yeah, I understand, I've been there."
ME: The extraordinary thing about the Muppet cast in comparison to other families of fictional characters or even a lot of sitcoms aimed at adults is that the characters are always growing and evolving rather than remaining static. The downside to this is when fans complain, "Piggy's changed" or "Gonzo's mellowed" when in truth the basic essence of the character hasn't altered but they learn and grow and develop just as we all subtly change over the years. They gain more dimensions, even the ones that start out as one-note characters like Beaker, Animal, and the Swedish Chef. But then as a writer, how do you feel when you hear such criticisms?
JUHL: The last thing we want is for the characters to become predictable. When I see those comments, I don't know what to do. Sometimes I'll look at older tapes and ask has this character gone in a different direction? Still, I'm a strong believer in having the main characters evolve and keeping them fresh and finding new places to put them. Otherwise, they would just be corporate icons. They need the space to move on and grow and to allow the writers and the audience to find out new things about them. So, I'm sorry if it disappoints some people, but it's like all my friends that I've known for a long time too, they've changed over the years as well.