According to Strange Fascination, Nile Rodgers was annoyed with Bowie for his casual treatment of Lucy Can't Dance. Buckley quotes Rodgers as saying:
'(Bowie) had another song, 'Lucy Can't Dance,' which was a guaranteed Number 1 record, and everyone around him was totally perplexed when it only appeared as a bonus track on the CD. He was running from success and running from the word 'dance.' Imagine David Bowie and Nile Rodgers together, and we come out with a song 'Lucy Can't Dance.' Smokin'!! I was already accepting my Grammy. But he was not budging. It was an exercise in futility - no matter who I tried to call, it fell on deaf ears.' (p. 431).
I think that this says one thing. Bowie did not want to tread down the path Let's Dance took him down a decade before. Bowie's quite perceptive - he probably knew that LCD would have been a hit single - but perhaps he figured that he didn't want it to be that sort of hit. Or perhaps he did intend it to be a criticism of Madonna, and decided that he didn't want it to get too much attention.