Butler scored 29 points, 21 in the third quarter, turning a potential blowout into a close game. The Magic held on for an 89-80 victory Tuesday night.
"We can't limit anybody at that position," Van Gundy said. "If you are a 2-guard, we're the team you want to play."
Hedo Turkoglu led Orlando with 22 points as the recently energized Wizards (7-26) failed in their bid to win for the fourth time in six games.
That came less than a month after another shooting guard, Kobe Bryant, scored 41 points in an Orlando victory. Rookie shooting guard Courtney Lee got his first career start against the Wizards, and it was a rude awakening.
Lee held Butler to 0-for-5 shooting in the first half, but the third quarter was all Butler.
"In the third quarter, Caron handed it to him," Van Gundy said. "Caron is a hell of a player. That's how I would assess it."
Orlando center Dwight Howard had his league-leading 25th double-double, with 15 points and 16 rebounds. Jameer Nelson added 14 points for the 27-8 Magic, who rebounded from their loss at Toronto on Sunday.
Antawn Jamison scored 13 for the Wizards, who fell to 0-3 against Orlando this season.
Orlando opened the fourth quarter hitting only three of its first 15 shots as the Wizards drew within 83-80 in the final two minutes. Nelson hit a basket and Howard made a pair of free throws with 34 seconds left to seal the game.
Butler had 21 points in the third quarter, three short of tying Bryant's Magic opponent record set in 2004.
Butler made 12 of 19 in the second half. The solution? He said he just needed to figure out that the double-team was coming from the baseline.
"In the first half they threw a lot of different things at me," Butler said. "Stan Van Gundy is a former coach of mine [at Miami]. He was getting me out of my sweet spots and throwing a lot of double-teams at me. Once I figured out where they were coming from, I was OK. And then I found my rhythm."
Wizards' coach Ed Tapscott said he never wavered from using Butler as his primary weapon.
"I told him at the beginning of the [second] half that we were going to run the first play for him and we were going to keep coming to him," Tapscott said. "I told him, 'Don't worry about the first half.' He's a quality player, and I knew his shots would fall, and they did. So he made me look good, for a moment. But we didn't have enough."
Orlando went up 46-30 at halftime, aided by a 16-6 edge in the second quarter, and looked to cruise.
"We put ourselves in the grave in the second quarter. And in the third quarter, we kid of dug ourselves out," Tapscott said. "But even you have those real big lulls, when you get down double digits, so much energy is expended trying to get back. Then when you get even, that's where they make their run."
The Magic led by as many as 17 points before Butler single-handedly brought the Wizards back in the third quarter.
Orlando's Rashard Lewis, who had 12 points, pointed more toward the Magic's defensive shortcomings than Butler's offensive skills as the reason for the comeback.
"They've been playing well lately and picked it up in the second half and started making shots," Lewis said. "But I thought it was mostly on our end. We got lackadaisical and didn't play good defense. We played terrible on the offensive end, didn't move the ball around, didn't have a rhythm and they got back into the game. We have to learn to beat teams and put them away if we want to be one of the best teams in the league."
They'll quickly get their chance to prove that. Orlando, which has won 10 straight home games, heads to Atlanta for a key Southeast Division matchup on Wednesday. Orlando leads the Southeast by four games, but the Hawks have won six of their last seven home games against the Magic.
Magic guard Mickael Pietrus was inactive, out with a broken wrist. ... Howard made five of six free throws, but had only one blocked shot. Howard, the league leader, has blocked at least one shot in every game but one this season.