There's always a lull in between a project's announcement and it's development. When they announced plans for the movie, they didn't say they even had the barest of a plot. There needs to be time to get a working script in order. Not to mention the fact that they're filming a Muppet movie just now. I'm guessing it's going to be a while for a slight update. If the film really is dead in the water, it's going to be some time before we hear that news anyway.I hate to say it, but I think this project is most certainly dead - or it'll be a long time before we see it. Since the announcement, Sesame has gone through some major transitions and I really doubt the team is really ready to do a theatrical film.
If anything is going to kill this project, I doubt it really has to do with Kevin. More likely Fox looked at the box office of the previous two films and wept openly. As much as we loved FTB, that film didn't make all that much. EIG made even less.