After cooking veal in a skillet, it turn turned gray rather than browning. Any thoughts as to why?

Would Toby have been better off using an oil with a higher smoking rather than the butter?

There are a whole host of reasons, but the most likely is that your pan was not hot enough when you put the veal in. In order for your meat (or anything else, fir that matter) to sear properly, the pan - and the fat in it - needs to be hot before you put anything else in. Dropping a small cube of bread into the fat is a good way to test if you hear and see the sizzle.
As well, to ensure your coating sticks, it's usually a three-step process: 1) dip in seasoned flour and shake the extra off; 2) dip in beaten egg; 3) dip in seasoned crumbs or again into flour.

Meat is often soaked b butchers before sale- if it releases a lot of moisture in the pan it won't brown normally and will tend to come up gray- even if you boil off the moisture, your fond will tend to be more in the pan than on the meat.

Cast iron gets hotter than non-stick so will brown the meat better. Also was it patted dry (with a paper towel) before you dipped it in the coating? If it was too "wet" that could cause steam and prohibit browning. Crowding the pan also can lead to a poor result as Maedl said).

It sounds like your pan wasn't hot enough, and also probably cooled a little when the meat hit the oil. (Crowding could add to the problem, but you say that wasn't the issue.)

What kind of cut did you use? A thin slice? Why did you add butter to the egg mixture? Did you crowd you crowd the veal in the pan? Did you fry it too slowly?