Actually, I always thought the "Jack" persona that comes up when Jack plays a villain resembled the Joker in many ways. He could probably pull off the "more serious" Joker intended for this movie, but I guess too many people would have the "old Jack" sticking in their minds too much for it to work. So they had to go with someone else.
IMO, Jack's a much better actor when he's not playing a villain. When he's not tempted to ham it up, he's pretty good.