One caveat, this is completely from Larry Brown's perspective and undoubtedly former UNC AD Dick Baddour would have a different story to tell. It does however line up with the rumors that the interview, which was thought to be a formality, went poorly.
Brown says now that he always felt he was more of a college coach than a pro coach and that he wanted to return to a campus. The biggest lure and the biggest hurt was North Carolina. When Dean Smith decided to resign, he told Brown how much he loved him but that the job belonged to his longtime assistant, Bill Guthridge, especially since Smith had left his successor a cupboard stocked with talent. Brown had never wanted to replace Smith. He knew that no one could fill those shoes. But when Guthridge left in 2000, things were entirely different. Smith called him and told him that he had recommended Roy Williams, who had succeeded Brown at Kansas, because Brown had been away from the college game too long. But if Williams declined — as he eventually did before taking the job when it opened again three years later — Smith said, "It's your job." Brown was ecstatic. This was the vision come true — what Brown calls his "dream."
With Brown thinking it was a formality, Dick Baddour, Carolina's athletic director, came to interview him at Brown's home in Bel-Air. What followed were what Brown calls "the most humiliating two hours I ever spent in my life." Baddour proceeded to tell Brown all the reasons that he shouldn't take the job. Crushed, Brown immediately phoned Smith and told him that Baddour didn't want him and that he couldn't possibly work with someone who so disliked him. Smith said he could get him the job anyway, but Brown didn't want to be forced down their throats. "If they had offered me the job, I would've walked from California," he says now. But they didn't, and he didn't want to pressure Smith to get that offer. So it was back to the NBA.
In short, Brown may have been the victim of a power struggle between Baddour and Dean Smith. Coach Smith was dictating terms on who would succeed Bill Guthridge which started with Roy Williams. After Williams turned the job down, Smith wanted Larry Brown who indicates it was a done deal with the interview just being a formal hurdle to be cleared. If this account is accurate, it stands to reason the way Baddour conducted the interview was a means of pushing back against Smith. It also may have been that Baddour simply didn't want Brown, had concerns about his past NCAA issues, etc, etc, etc. Whatever the case it appears Baddour made it clear from the start any kind of working relationship between the two would be a difficult one. Despite Smith's pleas he could still have the job, Brown decided not to come.
At this point, I have my doubts as to how long Brown would have stayed. His reputation of moving from one job to the next is well-earned. It is possible his stint at UNC may have been as long as Matt Doherty's which means things may have played out just as they did with Williams following Brown instead of Doherty at UNC. Or maybe UNC was truly Brown's dream job and he would have stayed until retirement. Obviously we will never really know.
Whatever the case, Brown's perception of how Baddour treated him might be part of the reason he sided with Kansas in the 2012 NCAA Tournament. Yes, he had also been the head coach there but one cannot discount what happened in 2000 as a potential factor in the quality of Brown's loyalty to UNC. I also am hard pressed to complain too much about how the last 13 years played out. The Doherty years were painful but the Roy Williams era has more than made up for it with two NCAA titles, six Elite Eight trips and multiple 30-win seasons. In hindsight, it probably worked out for the best.