I used dcfoodie's suggestions and the frosting turned out beautifully! I added 1 1/2 tablespoons of butter and two tablespoons of milk. I'm not sure exactly how much powdered sugar I used though, I just dumped the rest of a bag in (I'd guess it was about 1/6 of a 2 lb bag).
I had the same issue as the previous reviewer. I followed the recipe exactly and ended up with a crumbly mess. Adding more milk and butter made it spreadable but the result was not the caramel goodness that I expected. There are better recipes out there and I will use one of them next time.
I must have done something wrong. After cooking the sugar and butter, cooling and adding vanilla, I then went to add the powder sugar in the mixture and found myself with a grainy lumpy mix -- pebble-sized pieces with no liquid or moisture to transform in into a frosting. It made me wonder what the previous reviewer did differently, if one of the ingredients wasn't missing. I ended up adding a chunk of butter and a splash of the condensed milk in the mixer and it came out very good -- a little sweet (3 cups is a LOT of powdered sugar!) Would be really curious to hear if anyone else had problems because I checked and double-checked it afterwards and I didn't do anything differently, and it just seemed to be missing an essential moisture-giving ingredient. But if you just add in some butter (about 3 T) and probably another 2-3 T milk, maybe cut down the powdered sugar to 2 or 2-1/2 c., it should work beautifully.