http://www.dvdtalk.com/dvdsavant/s70grease.htmlThis was discussed in '78 when Grease came out, and you basically hit on the correct answer yourself. It was before 'product placement' was big biz - now there are special people at every studio and many independent producers whose job it is to get 'consideration' for the use of products and logos in films.
<SNIP>
But back to Grease. Savant read at the time that the producers filmed the Malt Shop scenes with the Coke signs prominent and only later did studio lawyers ask if clearances had been obtained. Uh, no, why? This meant that Coca-Cola had to be consulted, and with the scenes already in the can, The Pause That Refreshes was in a unique bargaining position. Their decision to say no was made on grounds of taste, not cash. After seeing the raunchy content of Grease they declined to allow the display of their logos in such a trashy film. This same problem griped 1941 when the Crackerjack people didn't want their candy-coated popcorn product used after reading the script. That's what made writer Bob Gale invent 'Popper Jacks'. Same goes for the 'Stay-Puft Marshmallow Man' in Ghostbusters, Savant surmises. Obviously the Pillsbury Doughboy didn't want to be R-Rated. Crackerjacks probably never regretted their choice to say no to 1941, but Reese's pieces clearly chose right when they said yes to E.T. The Extraterrestrial three years later. In the media storm around E.T., Reese's gained a market foothold impossible to buy at any price.
So what were the producers of Grease to do? Apparently bringing the stars back and reshooting the scenes was economically out of the question, so the only other choice was to bring in the special effects people to obliterate the Coke signs with those funky grey rectangles.
<SNIP>