This is particularly true in sport horses such as
Thoroughbreds where susceptibility to these types of injuries is
widespread due to the exacting nature of training and racing schedules.The controversy is two-fold.
On one hand it centers on the integrity of the sport of horse racing and its use as a permissible race day medication in North America. By contrast, no other racing jurisdiction in the world sanctions race day medications – phenylbutazone included. Not only does this implicate the ambiguity of "performance-enhancement" but also the welfare of the horse.
Bute is a potent anti-inflammatory that may not necessarily make a horse run faster but instead enables enhanced joint mobility that otherwise would be compromised in a horse with a weakened musculoskeletal structure in consequence of trauma incurred during training and/or racing; a horse that feels no pain will run as he would without the underlying physiological problems associated with his legs, feet or joints. Hence the premise of bute as a "performance-enhancing" measure.
Ironically the horse welfare component is intricately coupled with the "performance-enhancing" perspective; a dichotomy of sorts. However difficult it is to envision how these seemingly disparate aspects of “bute” as a race day medication are derived from the same argument nonetheless they do. Despite the administration of the drug to quell the discomfort a horse may experience on race day, at the same time there is concern within the industry, in particular veterinarians and Jockey’s alike, that bute precludes the ability to perform an instructive clinical appraisal to assess the soundness of the horse as a result of its masking effects.
"The preponderance of scientific evidence indicates phenylbutazone at levels currently permitted in U.S horse racing compromises clinical evaluation." 
In view of the deprecating attitudes expressed by racing jurisdictions around the world, together with these data and recommendations from a number of regulatory racing bodies within North America, the Racing Commissioners International (RCI) was motivated to make a proposal for reduced threshold limits in late October 2010. Effectively this would more than halve the race day threshold level from 5 µg/ml of plasma/serum to 2 µg/ml.
"The RCI’s Model Rules Committee suggested lowering the threshold for penalty for phenylbutazone — also called bute — to the board based on recommendations from the RCI Regulatory Veterinarians Committee, the RCI Drug Testing and Standards and Practices Committee, the Racing Medication and Testing Consortium, The Jockey Club’s Thoroughbred Safety Committee, The Jockey’s Guild, the Thoroughbred Owners and Breeders Association and the American Association of Equine Practitioners (AAEP)." 
A step in the right direction? Perhaps. However, at best it is an insubstantial compromise for the real implications.
First, there is little scientific knowledge as it relates to a decrease in plasma serum levels and the effects on the ability to detect infirmaries during pre-race examinations that may warrant race day disqualification. Secondly, it does not solve the race day medication issue.
"In fact, an honest analysis of the
published literature suggests if horse racing is to completely eliminate
the problem of phenylbutazone masking injury, U.S. racing would need to
adopt a minimum 48-hour withdrawal time for blood testing or the
long-standing international rule based on urine testing." 
those interested, the phrase "or the long-standing international rule
based on urine testing" will, in due course, become the focus of this