“We couldn’t reconcile the unreality of this international organization and our place in it,” Phil Strub, the Defense Department’s Hollywood liaison, tells [Wired’s] Danger Room. “To whom did S.H.I.E.L.D. answer? Did we work for S.H.I.E.L.D.? We hit that roadblock and decided we couldn’t do anything” with the film.
That is a real quote, from a real person in U.S. Government. The Avengers was too out there for them, the people who have provided personnel for such realistic films as Transformers.