Here I be, here I be.
Well, to be perfectly honest, the Gonzo nipple incident is unbeknownst to me. I assume it was in MWoO, and I boycotted that production. I'll probably buy the DVD though for collection's sake. However, I'll assume that I'm understanding the situation: at some point, Pepe touched (rubbed?) Gonzo's nipple area, and people became up in arms over it. Yes?
If this is the case, I think that if I were to be upset by this scene, it would be for this reason: the cumulative. When TMS portrayed sexual overtones, I feel that due to the geniune nature of the overall production, it was taken in stride. I think a great way to sum it up would be similar to the way a sexual overtone was taken in a Marx Brothers' production; its all so wacky and wonderful that sex is not meant to be sexy, it was meant to be funny, just like any other gag. This falls in line with the fact that we know nothing perverse was portrayed in the productions in any other facit (which is another reason why the "Alice Cooper was a bad influence and still made TMS" argument holds no water with me).
Now again, I haven't seen the scene in question and can't pretend to know the elements of the situation as of right now. However, I think that
if I do understand correctly, the uproar (if there is any actual uproar) would be due to the cumulative shift in Muppet productions. With the move towards more "with it" humor, an overhaul of standards in regards to the writing has taken place. And, as we all well know, sex is now more than ever becoming a commonplace in our mainstream entertainment.
What I mean is this: if you move from the classic style and completely revamp the characters' dialogues to come off as "hip," sexually oriented material is no longer zany and part of the fun as it was in the classic format. It takes on the current dynamics, which are to be provocative and cause some kind of specific reaction. This may not have been the intention of the writers and cast, but when shift one element, shift 'em all, especially when that change it towards being trendy.
I really do have to see the scene in question though; nipple-rubbing would probably have crossed the line with Jim even in the classic era if it was portrayed in the way I think it was. I do hope Gonzo was not bare-chested..