I use sifted confectioner's sugar in my buttercream frosting. Granular sugar definitely has a different texture...I would think it is too grainy for frosting. I also add a little almond extract to mine for flavor. :)
When you say "Buttercream" are you refering to the recipe called such on the back of the Powdered Sugar box? If so, then no you cannot substitute granulated sugar. Keep in mind that powdered sugar has additives in it that affect the outcome.
"Just can't wait to get on the road again." Willie Nelson