The offer was actually made by Key to the former Labor-led government of Julia Gillard, not the later Liberal Turnbull government.
"You've got to go back and ask, why did [Key] make it? I'm still waiting for an answer," Peters said.
"New Zealand's not anti-refugees who go through the UN system and don't hijack the process. We've always been responsible for that. But by the same token we're cutting back immigration quite seriously because of demands on New Zealand society," he said.
Peters said the close friendship of Key and Turnbull, once dubbed a "bromance", had done nothing for New Zealand.
"We were told they were the best of mates, Mr Turnbull that is and Mr Key, so what changed to help New Zealand as a consequence of that friendship?"
Asked whether he had any reservations about New Zealand taking single male asylum-seekers, Peters said he would cross that bridge when he came to it.
"Wait until the Australian election is over. It may not or may be the case."
Prime Minister Jacinda Ardern last week denied Australian media reports that New Zealand was refusing to take single male asylum-seekers from Nauru and Manus Island.
The Courier Mail reported that senior New Zealand departmental officials told their Australian counterparts that New Zealand was no longer open to resettling single men.
But a spokesman said the stories were "not true".