Historically, Dylan has often played smaller venues in Detroit itself:
http://www.bobdylan.com/us/events/location/Detroit,%20MI#us/events/location/Detroit%2C%20MI2012, 2009, 1991, 1990: all Fox Theater : 5000
2005 : 4400
2004 : State Theater: 3000 (though three consecutive nights there)
2001 : Not Cobo Hall but Cobo Arena: 12000
1999: Saint Andrews Hall : 1000 (a "night off" solo in the middle of a tour with Paul Simon playing large venues)
1994: MI State Fair : no idea of capacity or attendance
The Palace of Auburn Hills is near Detroit (capacity 20700) and he's played there twice:
2006 : supported by The Foo Fighters
1998: supported by (1) Join Mitchell and (2) Dave Alvin and the Guilty Men
I have no idea of the thinking behind the booking but maybe someone thought Dylan plus Mark would do just as well as Dylan plus Foo Fighters. If the venue change was the result of poor ticket sales, then it seems they were wrong. Equally, the recession has hit Detroit very hard indeed. According to one site I've seen, top price tickets are over $200 each at some of these shows.
I'm pretty sure Dylan has played in the Detroit area, if not Detroit itself, on other tours but I don't have the inclination to go digging around for details just now.
Has Mark played the Palace of Auburn Hills himself before?