"Rip Van Winkle" is a frame narrative because the narrator is on objective third person who tells the reader the story ‘‘was found among the papers of the late Diedrich Knickerbocker" who was known to have spent most of his life researching Dutch history. This adds a certain feeling of authenticty to the story. Instead of just saying "Hey, I heard this story" Irving's narrator adds credibilty to the story's origin.
As the reader we must suspend disblief when we realize Rip Van Winkle has slept for 20 years. Obviously this could not happen, but it's important for the message of the story to have him sleep this long while the world around him changes.