It's an interesting theory, but a couple things struck me right off that he probably needs to go back and re-examine:
The skin of a Grey is very similar to that of dolphins, both in texture and in some cases, coloration. If you have an abductee look at a dark gray
porpoise, the response is in the affirmative. On Earth, the dolphins evolved legs and arms to function on land but later returned to the oceans.
X-rays clearly show the residual appendages in modern day dolphins. It is possible that the Greys evolved just as Earth dolphins but did not return to
the oceans, and continued to develop as a land-based mammal.
While this is an interesting theory, it overlooks the currently accepted theory (in the scientific use of the term, not the colloquial
wild-assed-guess use) that the dolphins' ancestor was wolf-like and land based. This would mean that it had skin similar to other land-based
predators: pinkish and hairy. The coloration of the dolphins' skin is a reaction to the marine environment. The color helps hide them, and the
texture allows them to move through the water easier, it's not that the dolphins' ancestor was a smooth, grey-skinned hairless wolf-like thing. In
order for the theory presented on the link to be correct, the dolphins would have had to move back to land after becoming dolphins. This isn't
impossible, and it may be that Mr. Butler simply needs to re-word his essay to make it clear that this is what he meant all along. Still, it's
something worth pointing out.
The eyes of Greys are described as large and black with what appears to be a protective shielding covering the eye. Many Earth aquatic animals have
developed protective outer-eye shields for underwater use. It is possible that this is a left-over attribute from the Greys' ocean
origins.
Dolphins don't have "eye-shields" to protect their eyes. They have eyelids like other mammals. If you accept Mr. Butler's theory, for the sake
of argument, it would be necessary to point out how the dolphins on the Grey's planet of origin evolved in a different direction than our own.
Again, not an absolute denial of the theory, but a point that needs to be re-evaluated or rewritten.
Some believe that on Earth, man shared a common genetic ancestor with the dolphin.
Technically, all life on earth shares a common genetic ancestor if you go far enough back.
Up to a certain point in development, human and dolphin fetuses are nearly identical.
Up to a certain point in development, human and iguana fetuses are nearly identical. Granted this point is not so far along as for dolphins, but
there are similarities the exist even after the "random blob of cells" stage. This, again, is true for most animals.
These last two points are pretty specious, and were probably thrown in to gain some easy points and to bolster an argument that is weak in places.
Ending on a strong note, basically.
The theory is an attractive one, and one that isn't without merit. The argument presented, though, isn't strong enough for me to embrace it as
anything other than an interesting line of thought.
Although I am skeptical about UFO reports, and think that at least as many of the sightings can be ascribed to the witness's desire to see a UFO as
there are genuine ones, I find the subject fascinating. I think, though, that it's as likely that Greys, or whatever other aliens we eventually
encounter, will be the process of their own evolution, unique, just as we are here.