I don't see a problem.
Personally I massively prefer Arch's package manager to anything I've seen on any RPM-based distro and it seems pretty pointless in having an "alien"-like RPM converter for Arch given how exhaustive Pacman + AUR is. However the point remains that Arch would fail LSB due to this.
Doesn't it need to just run rpm binary itself - http://aur.archlinux.org/packages.php?ID=16857 kinda suggests that's more than feasible.
It's great that it's available in AUR, but it wouldn't be enough to pass LSB - which is the /entire/ point of this tangent.
http://refspecs.linuxbase.org/LSB_3.1.0/LSB-Core-generic/LSB...
To me says that the distro can use any package format it likes ("The implementation itself may use a different packaging format for its own packages") as long as it can handle .rpm packages ("Implementations shall provide a mechanism for installing applications in this [RPM] packaging format"). So if Arch shipped RPM it would appear [superficially] to meet the requirements.
However I agree with you that lsb-release is not much used, and in some distros is only present when some huge X-dependent LSB package is installed.
But hey, we could fix LSB! Instead of, you know, making up something new that will be as little used as lsb-release.
cat /etc/lsb-release
DISTRIB_ID=Ubuntu
DISTRIB_RELEASE=11.10
DISTRIB_CODENAME=oneiric
DISTRIB_DESCRIPTION="Ubuntu 11.10"