well look at what they've done to Mickey Mouse Clubhouse and My friends Tigger and Pooh. (they didn't even bring back christopher robin instead we get this girl and her dog invading the hundred acre woods.)
It's an unfortunate trend in preschool shows... the talking loud and slow and pretending to be interactive (Hey boys and girls, Dora can't here what you're saying, and you really can't affect her movements or choices one way or another because they all had to be scripted and animated, and it's not a computer game!) Only thing I like about Mickey Mouse Clubhouse is the fact that Disney put the characters that built their entertainment empire in the public eye... well... that and the fact it has Ludwig VonDrake and Big Bad Pete in it. Pooh didn't need any of the futzing around with the character since he was on everything already to begin with.
I'd hate to see a Muppet Babies show that's similar to that. it would be a billion times worse than Elmo's World.
That said... remember... no matter which characters would look cool as babies, there's a certain amount of character chemistry and a huge huge cast may easily overshadow itself. When they added Bean to the cast in the old show, the writers barely knew what to do with him.