Well it probably wasn't up to him, if that's what they wrote for him to do. It wasn't his show. And why have Rich Little on if he isn't going to do impressions of you? And if you want someone as a guest star, you don't tell them their impressions of you aren't working, hehe.
Plus, in doing the Muppets, he's kinda doing an impression
of an impression. After all, the muppets are impressions of real "people", with their movments etc. It's not enough just to do the voice. It looked like he hadn't really taken the puppet movements into account. But then, even if he had, it would be hard for him to imitate, being a non puppet. It wouldn't always look the same.
In the end, no it wasn't perfect. But I think he had a very difficult job in imitating the Muppets. It wasn't horrible, he did his best. I did enjoy Mark Hamill's more, though they weren't perfect either, few impressions are. But he just went and had fun with it. And had a better idea of the movement. The whole skit was thought out better. And he had the benefit of stronger developed Muppet personalities (later on in the series). But in the end, they were both very talented.