I thought that the last point we had got to with Ken on the Theatre was that the playsets definitely wouldn't fit on the stage (because of the dimensions of the Kitchen and PIS) anyway, and even at $80 for the huge one without this feature there was little chance of it happening and so they could make it as a deluxe playset (like Chef's) in the regular playset lineup. Then people complained and they announced they'd put it on the backburner to see how things go incase they could make a big one. I don't quite think they had completely no interest of making it as a playset in the regular line, at least not from whats been posted on the forum.
Personally i completely support just making it a nice deluxe playset - with the regular playsets so far not being all that popular and them having to make changes to their release because of the sheer cost even one of those takes to put into production we really have no chance of getting the giant one - even if Palisades made it they would need to manufacature a LOT of them to justify the sculpting/tooling costs and then they'd probably struggle to get orders from enough retailers so it's probably better to have a Muppet Theatre in some form than none at all. I don't see why it couldn't just clip onto a possible backstage set as a compromise with the fans to make it bigger and get the thing out. Look at what Ken's done with the Kitchen, i don't think anybodys going to be dissapointed once they see what he can do with a Muppet Theatre on a slightly larger scale.