Where do we place a poet who produces normative free verse but publishes it with small presses and keeps blog? Did Ashbery lose his avant-gardener status the moment Auden chose him as a Yale Younger Poet? If Jorie Graham wrote the exact same poems but published with O Books instead of HarperCollins, would the poems somehow be different, or at least read differently?
Here's the thing: the very idea of "normative free verse" is an effect of poetic institutions. If we could imagine a world in which poetry was entirely local--circulating only among peers who passed around small-press manuscripts and knew each other through reading series, but whose work never circulated outside a narrow geographical area--if there was no Harvard, no Iowa, no New York Times Book Review, no University of Chicago Press--there would be no such thing as "normative" verse. (I'll leave it to others to decide whether this would be a poetic utopia or a wasteland of isolation.) The normative can't be detached from the powerful, national channels through which it circulates; and whatever you want to say about MFA programs, at the very least they have the function of strengthening an idea of normative verse by offering formal, professional training in poetry writing. (That's not to say that they offer only one idea of the norm; a small but important group of MFA programs have helped to cement "experimental" style as a viable alternative within American writing, but possibly at the cost of making such styles paradoxically stable and rigid.)
The hypothetical practioner of "normative" verse, then, is working in a mode that's inseparable from certain institutions. It wouldn't make much sense to argue that such a writer is remotely "avant-garde" because he or she publishes with a small press or has a blog, any more than Seamus Heaney ceases to be an institution by issuing the occasional broadside or limited edition.
It would be nice to argue that blogs are an inherently subversive form, but for all their troubling of the media waters they can be just as reactionary as they are radical. It might be more accurate to say that a practioner of "normative" verse does not need a blog, except as an auxiliary or stepping stone to the "real" goal of publication in a prestigious journal. And indeed, I do think there is some divide among poet-bloggers in this respect: between those for whom the blog is a largely casual adjunct, a way to promote "real," off-line work, and those for whom the blog is an end in itself (perhaps for writing that has no other obvious potential outlet). Both seem perfectly legitimate uses of the form, but I don't think there is much that is "avant-garde" about a blog unless it is doing something that couldn't really be done in another forum.
Re Ashbery: again, I don't think that avant-garde can really be understood as a status that an indivdiual writer has or doesn't have (like street cred, or something). Yes, it is often used in that sense. But Ashbery's a good example here: there are certain gestures he makes in certain contexts that I would clearly want to describe as avant-garde, and others that I would not. It's not so much about the person as about the moment and the context, as well as the content and the form. Language writers like Charles Bernstein, for instance, often celebrate some of Ashbery's earlier work (esp. The Tennis Court Oath), but express frustration with Ashbery's later canonization, and Bernstein even (if I'm recalling this correctly, from an early essay) charges Ashbery with being "complicit" in his own maisntreaming. Auden's patronage of Ashbery could easily have ended up looking like an aberration, if Ashbery had chosen to go down a certain path; but once Self-Portrait in a Convex Mirror swept the awards and allowed Harold Bloom & co. to proclaim Ashbery a part of the Great Tradition (Keats, Yeats, Stevens, etc.) Auden looked prescient rather than boneheaded. As soon as Ashbery becomes an individual "case," the question of avant-garde is pretty much moot.
If Jorie Graham published with O Books, she would be Leslie Scalapino.