Who said good music has to make sense? Good art doesn't have to—did Picasso's art make any sense, did Jackson Pollack's? No, because their genius creations trasncended the thinking of the time. And that's exactly what the B-52's did with Rock Lobster.
In 1979, the punk scene was beginning to split. It had outgrown its embryonic stage as a counter-culture style opposing the mainstream schlock disco. Oi! and Hardcore were starting to gain popularity and the roots of Alternative Rock were taking form in the the punk rock ranks. The B-52's were one such prototypical band. Though officially listed as New Wave, their music contains heavy Funk, Surf Rock, and Punk influences (as well as those of Richard Attenborough's Wild Kingdom). They also heavily integrated the kitchy and campy pop culture in the '50s in their identity but mixed it their own brand of avant-garde pop punk—like looking at American Gothic while on acid—to create a new and highly-influential sound.
This was actually a really popular song, one of the bad's signature tunes. It reached #1 in on the Canadian national chart on May 24, 1980 and reportedly even convinced John Lennon to get back into music after a five-year hiatus. "It sounds just like Ono's music," Lennon told Rolling Stone. "So I said to meself [sic], 'It's time to get out the old axe and wake the wife up!'"
*Sigh* And yes, this is also the song from that Family Guy episode.