M1 and there co promotion demands are mental though. hey will happily co promote and take any profits but not any losses (see the death of Affliction as an promotion for example). The UFC has a proven revenue stream and has no need to copromote.
The money made in a PPV cut as with all of the UFCs top paid fighters would eclipse anything Strikeforce could have offered financially.
Sadly though I think when you get stubborn people like Dana White and Fedors management butting heads a compromise is never going to be reached.
To be fair there are only a couple of people in the UFC HW division I think could make a decent fight with Fedor. Lesnar being one, Mir and Dos Santos being possibilitys. I think the rest of the HW div like Carwin, Cain etc would all be on the wrong end of a TKO pretty quick.