There was a talent that could have defined the act, if they had ever displayed that talent I would have acknowledged it.
As for the costumes, whoever came up with those gimmick outfits did a brilliant job. I expect their real hands were inside somewhere on the controls manipulating the mouths, arms and such. No idea how they actually see, probably have a very limited view of their surroundings in any case. And though they did shuffle around a bit, I doubt even trained professional dancers could have done much real dancing in all that gear.
Anyway, the talent. Barney and his dinosaur friends, Big Bird, all those people at Disney parks through the years costumed as Mickey and Donald and so on, innumerable drag acts, Lon Chaney, Sr., buried in make-up and devices in those wonderful silent films: Acting.
Unfortunately, except for a couple of them talking with Nick and the judges, staying in character, they never brought acting into it, their routines were always just amusing little skits to recorded music, lip-sync parodies. Big missed opportunity, they could have done some funny stuff if they'd recognized what their talent should be. Mike them up and have them do a scene from "All in the Family" turning drama into comedy. Those Funny Little People present "I Love Lucy."
They just wasted their big chance.