Kermit is a name with a very complicated past. Essentially, it means 'son of Dermot'. We do not know what Dermot means, but one of the more educated speculations is that it comes from dí (without) and either airmit, (injunction) or airmait (envy). Either way, the Irish patronym MacDermot arrived in the Isle of Man during the period of Celtic settlement (~700-800 A.D.). As the Mac- slowly faded from Celtic names, the 'k' sound was moved to the beginning of the following syllable, and the 'ma' dropped altogether.
And that was mostly that. The Isle of Man isn't a big player on the world stage, and Kermit would have gone down in history as one of a hundred thousand unusual family names if it hadn't been for one particular descendant and the fun American habit of using last names for first.
U.S. President Theodore Roosevelt had a Manx ancestor by the surname of Kermit, and named his third child (but second biological child, and thus the second child named by him) Kermit Roosevelt. Kermit had a rather exciting life, but suffered from alcoholism and depression, ending his life with suicide.
Kermit Roosevelt had two towns (Kermit, Texas and Kermit, West Virginia) named after him, along with a Luzon-class repair ship, the USS Kermit Roosevelt (ARG-16). Perhaps of more interest to Kermit's ghost is that Kermit Roosevelt, Jr., Kermit Roosevelt III, and Kermit Roosevelt IV all went on to have distinguished careers in the government and law.
This put Kermit back into the spotlight, this time as a given name. It became fairly popular in America, peaking in 1909-10 when Franklin Roosevelt left office and took his son (then in college at Harvard) on an expedition to Africa, but with a second spike in 1914 when the Roosevelt-Rondon Scientific Expedition returned from Brazil, followed shortly by Kermit's marriage to Belle Wyatt Willard, and a third, even smaller peak in 1919, the year of Franklin Roosevelt's death.
Kermit was a well established name by the 1940s and 50s, and when a young Jim Henson was naming his Muppets he chose the name (for no apparent reason) for his central character, Kermit the Frog. This is now the primary association that Americans (and, I suspect, the rest of the civilized world) have with the name Kermit. Since the initial frog-naming in 1955, Kermit has slowly decreased in popularity as a given name. While it peaked in popularity in 1909 (175th most popular name in America!) it dropped permanently out of the top 1,000 names in 1978.