In reply to:
That suggests that Bowie would have reacted to it by pandering
Pandering is not how I'd describe it, but I think Bowie's career has shown that many of his commercial hits have been followed by less successful attempts to repeat it, Tonight and even Reality being examples of that.
S2S is experimental, but it's not uncommercial. It was a huge hit, based mostly on the success of the radio friendly 'Golden Years.'
BTWN was a hit, but a very brief one. Granted, that's due mostly to the record company going bankrupt, but regardless the album did not succeed in bringing Bowie back to the spotlight in the way a huge commercial single might have.
My point was that if Bowie had had a huge commercial single, which a duet with Jackson would have been, it's not likely that albums as truly uncommercial as Buddha and Outside would have followed. He would have been worried, and may not have even thought, to go in so different a direction. After BTWN was only a mild hit, I think he decided to just do what he wanted.