I like him ... but my issue with him at first was that he seemed to take Rizzo's place as the in-house sleaze. Rizzo was always portrayed as street-wise, crass, sarcastic, and womanizing (at least to Brooke Shields in Muppets Take Manhattan).
Then, when Rizzo started mellowing in his relationship with Gonzo (as friends, gutterbrains), Pepe took up the slack as the sleazy jerk. In fact, Pepe is both raunchier AND FUNNIER than Rizzo. I prefer sleazy Rizzo -- but I have to hand it to Pepe ... he knows what he likes, and he seems to want it more than Rizzo ever did.
And I agree with the Rizzo comment.
At least with Rizzo he was a lovable muppetlike sleeze.
Pepe is just... I dunno bad sleeze. And they use him as an accuse for using slight (sometimes overlooked) sexual comments.
I just don't feel like he's a muppet to me.
Yeah, Pepe bugs me too. He's basically done to the Muppets what Elmo's done to Sesame Street. Although, he's more tolerable here than he was in Muppets From Space.