Exactly. It's a callback to one of the things I didn't like about Segel's film - Muppetless dance numbers.
I don't mind the Muppet-less dancing in M11. There's not too much of it and it's at least interesting to look at.
I don't like what they did here in MMW because it's a jumble mess with no spectacle. If they people did actual, um, dancing, it'd be semi-neat. But instead, we get three dudes doing a poor Charlie Chaplin impression. That would've been the perfect place to throw in the big monsters or just a bunch of utility Muppets just going crazy and wrecking stuff. Even the ending of the song, where the Muppets are not really the main focus, makes itself a big spectacle.