Apparently so, according to this from Cinema Blend:
In a few weeks Alec Baldwin and Steve Martin will take the stage in Hollywood to host the 2010 Academy Awards. But they weren’t the first choice of the show’s producers. Adam Shankman and Bill Mechanic were looking to shake things up this year, in a big way, a much bigger way than simply having two hosts. They wanted Sacha Baron Cohen.
Talking to Contact Music Shankman reveals, “The Academy swatted it (idea) down. They thought it was too big of a wild card.” They were probably right. Though the ceremony would have grabbed headlines, Cohen’s comedy is as divisive as it is funny. In the end, whatever he brought to the ceremony would have ended up alienating half the audience and would definitely have been a huge distraction from what the point of the whole thing is supposed to be: recognizing great work in great movies.
A Sacha Baron Cohen hosted Oscar ceremony would, by nature, be all about Sacha Baron Cohen. It wouldn’t have been boring, but it wouldn’t have been the Oscars either.