To me, this personally says they were not happy with Butler's ability to get Elam to a place where he could contribute. Especially the part about "mutually decided to part ways". Yes, he may have gotten Benford and Jackson up to speed and helped Douglas integrate well, but the Bills spent a first round pick on Elam who has massive amounts of untapped talent and I feel they are laying some of that at Butler's feet. At the very least they believe he should have been able to help more than he did over the last 2 years.
Likely both sides were getting frustrated with McD believing he didn't do enough with Elam and Butler pointing out all the others who performed well above expectations. Likely just both said they had enough and had reached an impasse. Butler also may have felt he did enough for DC consideration but McD likely laughed him off and said we gave you a premier talent and you did nothing with him, how can I justify that?