What a lame idea. I have no idea who started this but clearly they "love" LOTR and that's about all they know about Jackson. There's nothing else in his resume that indicates that he would be any better at directing EP III than anyone else. Stupidity.
The fact is that a director is no better than the script that was written, the actors that he has to work with, or the very strong (Lucas) producer that he'd have to work with. Jackson, or anyone else, would still be at the mercy of a poorly constructed prequel series and fading enthusiasm for the saga.