If the reason is related to scholarship limits, that means they reached the 85 limit without him. Another reason would be a personal choice on his part.
I haven't figured out whether a grayshirt extends a player's career, since the eligibility clock starts ticking at some point (although it may). However, he will have the benefit of two semesters with the team, a fairly long period to adjust, which may eliminate the need for a redshirt year.
I'd be interested to hear people's opinions on this. I wonder if Vigo's on-again off-again commitment is indicative of something. They may not have wanted to include him in this class -- something about meeting their quota of LBS, perhaps?
BTW -- the 25 yearly limit (24 for CU right now), is not the problem, it's the 85 total limit.