For stage purposes. That way if I were behind the stage I could have the full puppet, feet and all hanging out on the stage without breaking the magic.
Most of the Henson/Sesame Street Puppets are made this way if they are single person puppets with Rods to control the hands. Key examples of this are Elmo, Abbey, and Zoe from Sesame Street, and Kermit (when in full body mode, most of his puppets are 3/4ths and lack legs, they still all come up from the bottom), Mrs. Piggy, Gonzo, ect. from the muppets. Here aer some behind the scenes pictures that shows how they normally work (and why it is rare to see the handlers.) [link]