Well it turns out on the DVD that they actually went through many different versions of what happened to Muntz. [spoil]One of them was just him falling upward with the balloons, but they made him fall downward instead to symbolize that that attachment in Carl’s life had died out along with his house. There is also one where he chases Kevin into a foggy labyrinth and his obsession leaves him lost in there forever. [/spoil] So if his ending seems a little disappointing to some people, that’s why it is.
I guess Muntz is really more of a plot device to help inspire Carl to be driven to adventure so he can go out to Paradise Falls in the first place (and to reflect what Carl could have been if he had continued to let his unfulfilled goal make him lose sight of the importance of the people around him). It also becomes more obvious that the reason he’s so insane later is because he had been staying in same place for many years with no other people around and only one thing on his mind, which would cause anyone to go mad. If I could change anything I think maybe his short newsreel wasn’t enough to help you remember him later on. To me Hopper in A Bug’s Life and Syndrome in The Incredibles made such impacts very early in those movies that you wouldn’t forget them so much later on and their motives are easier to understand. I also think that if people did remember him that showing his dogs in the newsreel would give away that he’s the villain, cause as soon as you see the pack of dogs in Paradise Falls talking about their “master” some people might already know that it’s him. I always like it when Pixar would set up a nice character like Stinky Pete only to have him turn out to be a surprise villain, and I guess that’s what Muntz is too but the dogs almost take the surprise out of it.