Why would Squidward mention "crabby" in this context? Like a Kraken for calamari, does the "crab" have negative images in western culture, perhaps?

Native speaker’s answer
Rebecca
It's perhaps a slightly different negative connotation. People in the west have nothing personally against crabs, and in fact, love eating them! But the phrase "crabby" means to be "irritable," "grumpy," or "cranky." So he's actually used it as a pun, a play on words between the animal "crab" and the adjective "crabby." However, I do imagine that since a crab can hurt you with its clippers, and could be annoying itself, that that's where the term comes from. Ex: Julia is being really crabby today. Don't upset her. Ex: Why are you so crabby?