According to
Ernie, "Wubba wubba" was what scary monsters under his bed in the dark would say. I remember
Bert repeating this, slowly, in his nasal bleat: "Wub-ba wub...ba?" And then shaking his pointy, tufted head and telling Ernie to go (the hell) to sleep.
Sheep counting ensued...
Update -- Sesame Street now has a repeating bit called Monster Time, in which four very hyperactive and multicolored monsters sing "Wubba wubba" songs.