The frog is dead.

The movement is just residual action potentials triggering a nerve impulse. The same will happen if you sprinkle salt on frog legs that have been dead for a little while. Once kermit kicks out all of the Potassium out of his muscle tissue it will stop.

Unfortunately I've seen this with humans as well. This is also the reason it isn't uncommon that someone voids their bowels following death. The body experiences a series of very strong contractions in voluntary and peristaltic muscle tissue.

/Science.