I can't help but feel that the real problem with Number Three is that you probably don't like the show. I have yet to talk to anyone who loves the musical that doesn't think the movie is pretty fantastic. And Russell Crowe CAN sing Broadway style which is why he did do a good job as the Javert with that deep voice of his. The one complaint I have heard is that whole song in the carriage after Valjean saves little Cosette was made up for the movie and does not exist in the show. Which is strange because they didn't do that with any other songs, though they did abbreviate a few of them. The love of Marius and Cosette exists to shed more like on Valjean's character. I can see someone's dislike for musical theatre as the cause for this movie to be on the list, but third worst? Haha, it's all good though, we all have our opinions. I went with my girlfriend (who has a degree in theatre) and I expected to not enjoy myself at all, but I was blown away by the production. The only weird thing about the directing for me is all the closeups on the characters faces. I just don't know why it happened so much. It made sense in the context of some scenes (such as Ann Hathaway in her big number), but not in so many other places. I can see no award for directing but pretty much the whole rest of the show was really good.
Edit: As proof of how different opinions can be: a movie Bob really liked that would have made this list in place of that for me would have been Tree of Life, if that was from this year, not entirely sure. He didn't do a full review, but he did one of those abbreviated mentions in another review and said that it's pretty much incredible. I took the time and it was really disappointing. Boring and full of imagery that was at best confusing and at worst completely out of place. It took it's attempt at being "artsy" and threw them in your face, which doesn't work in a movie that is supposed to carry a certain pace. Essentially, while it may not have been a horrible film, if you were not in mood for it, it was. It's not transcendentally good and, IMO, not worth the good words it was given.
Edit2: I can't help but feel that everyone is taking the number placement on this list a little too seriously. I mean, is it worth arguing that movies me or a lot of others may have liked shouldn't place higher on the list (more bad, as it were) than movies that were placed lower on the list. I mean, the fact that a movie you are or people you know like a lot showed up on his top ten list at all should be the shocking. Whether it's number three, number one, or number seven shouldn't even matter. And you definitely should not be upset if it appeared higher on the list than American Reunion. It's really all the same.