100% this.
To expand on this excellent point, If Rockstar want to evoke a mid 80s feel with the soundtrack (and it appears they do) they won't manage it without music from the period. So, they're working with a limited number of songs from the era. And from that number, a limited number that fit the mood and tone they're trying to strike.
As noted by
PaintTinJr
, the authenticity of the track and it's iconic status, maybe more so here in the UK than the US* absolutely gives this song cache, as well as meeting all the other criteria noted above. And that's worth something. Because like gold (the metal, not the Spandau Ballet song - good luck licensing that for 7 grand) scarcity equates to value.
Hopefully the guy's willingness to expose that he rejected the deal will be enough for other 80s artists to refuse these lowball offers.
It wouldn't take a huge number of people to do so to scupper Rockstar's chances of getting a decent soundtrack together.
*I await a reply from "Disgruntled in Dagenham" telling me nobody they've ever met has ever heard the song.