You know what I love about the dream story? Besides everything? I love that Jim was all busy and distracted. From all we know of him, it seems like he wouldn't want to "rest in peace." I like to think that he still has important things to do.
All of the stories about how Steve was able to take over Kermit are fascinating to me. Not only that, but the fact that he was available to do so. If you look at his history with the Muppets, it's pretty clear that Jim was grooming him to be a main Muppet performer from the moment he hired him--or at least from not very long after. He was part of every major Muppet production after that. Nobody could have known what was going to happen, but there Steve was, a main performer without a main character. And then he just happened to be able to perform Kermit ("just happened," after a lot of hard work, but still). Dave Goelz described it as a "miracle" once, and I don't think that's too far off.