Almost every scene in LOTRs was CG. Remember these are animated movies with real people thrown in. Besides, why can't they use the same makeup job they did on him in the Hobbit flashback scene in TT or was it ROTK?
But for six more hours of movie? The guy is already 76 and will be even older by the time filming starts. I acknowledge that casting a younger actor will mess with the continuity of the prologue, and the idea that he hasn't aged until FOTR, but getting Holm to do a couple of action movies at his age is just not practical. Anyway, the trilogy was filmed almost nine years ago, so he's already older than he was even in FOTR.
That being said, I'm sure they'll bring in Holm somehow, as the narrator or as bookending cameos at the beginning and end.