I've got nothing against his chops, but he's too conventionally handsome/pretty. Whoever they pick should have a naturally tough look a la Damon/Craig/Statham.
One of the delights of TBI was that Damon as action hero was so unexpected. This preppy looking (though unconventionally handsome) guy kicking ass like a classic action hero. I wouldn't have said he was in the mould of Jason Statham looks-wise though.
Either way, I don't see the point in casting another Damon clone for TBL. I can see why they want to go for another young actor, that's been proven to work financially and critically and, within the movie, that would fit the mould for the people recruited by Treadstone. But I wouldn't have a problem with someone like Franco, just because he doesn't look like a traditional action man. I want the mould to be broken again.