Musical episodes are a dying breed, and with good reason having said this episode. That 70's Show was an innovative, cutting edge program that really saved FOX from extinction, giving them the stable comedy they needed after the end of Married with Children.
But a musical? Really? There was not a single gifted musician among this cast and that is why this made zero sense. You have to have one good singer, one person with legitimate theatre experience to make this work, and they did not.
At least it was better than How I Met Your Mother's musical episode (although that's not saying much.)