Since they're all signed to major labels or subsidiaries thereof, it's unlikely they've got a choice as to what happens with their music. If they're really lucky, they'll get paid.
I really don't think Kareoke is a good idea for most of these bands. The last thing these bands need is their lyrics exposed for the rubbish they are when people can read what they're actually singing.
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There's been plenty of rock tracks already on the series: Born to be Wild and Poison for a start, off the top of my head.
And yes, rock fans do karaoke too. Look at Rock Star:INXS' popularity.