According to The LA Times, Butler is being considered for the part made famous by Fredric March, James Mason and Kris Kristofferson. No offer has been made though, and his is only one of several names on a list. Warner Bros is still trying to sign Crowe, but they're not opposed to the man who is, arguably, his beefy successor. Butler certainly has a good track record with Warner Bros, having made them a boatload or two of money with 300.
Crowe seems better for the part. He's older and has much more of the Kristofferson vibe. His singing talents are a little questionable, though some might argue as vehemently against Butler's voice. (I like it.) It would be nice to see Butler dig deep and turn out a tragic performance, though. He's dodged the remake game thus far, but if he's going to dive in, I'd prefer it would be this than Escape To New York.