In an interview with Billboard, Justin Vernon said that Bon Iver was indeed offered to play the Grammys-- but only if the band collaborated with another artist. And so as not to compromise their music, they declined.
Vernon told Billboard, "We wanted to play our music, but we were told that we couldn't play. We had to do a collaboration with someone else. And we just felt like it was such a large stage. We're getting nominated for this record that we made, me and Brian [Joseph] and a bunch of our fucking friends, and we were given accolades for it. And all of a sudden we were being asked to play music that had nothing to do with that. We kind of said 'fuck you' a little bit and they sort of acted like they wanted us to play, but I don't think they wanted us to play."
Vernon described the proposed collaborators as "awesome people" and "people that [he] would love to play a song with." But, he said, "fuckin' rock n' roll should not be decided by people that have that job. Rock n' roll should be the fucking people with guitars around their backs. And their friends. And their managers."
Commenting on the band's Grammys commercial spot, Vernon said, "There's a big misunderstanding-- I don't want to sell music. But if people are going to be selling music, and they want to sell our music without disturbing the medium of what it actually is, we want to fucking do that. I want people to hear the music that we make. I don't want to do it in any shitty way."
As you may recall, it's not the first time Vernon has voiced his opinion on the Grammys, which air February 12.
Source.