Redlines are really turning into ricer math these days, especially with Honda and rotary enthusiasts. For a single given engine, it's better to be able to rev higher almost always (except when the engine isn't going to make any more power up higher), but one engine having a higher redline than another doesn't make it any better. In this case, the LS engines have broader torque curves than just about any engine out there, due to their displacement. They don't NEED to rev any higher to make power and to be fast, and this makes for a more enjoyable drive on the streets, where you don't need to downshift to pick up speed, as well as an easier drive on a road course, where you don't have to worry about losing a bunch of momentum if you fall out of your perfect rev range or boost.

You're only going to start to need higher revs when you mod the heads/valvetrain, at which point the engine is going to be able to take higher revs! You can take it to 6800 RPM or so, or add $200 in rod bolts (luckily the oil pan is easier to drop than the stock FD one) and take it to 7K+. Either way, not many LS owners feel jaded about their "low" redline. Some people prefer turbos and high revvers, which don't make a whole lot of sense to me on the street, but choose whatever suits you!

Also, by the time the engine is in the car and running, most guys' LS1's are around 400 FWHP or more with the inherent mods that come with even a basic swap.

Edit: Here's one example of a guy that spent $6500 for a pretty basic LS1 FC swap. That's without factoring in selling off the stock parts.
http://www.norotors.com/index.php/topic,456.0.html

The nice thing about the FC swaps are that more people are doing them on a tight budget, as compared to the FD swaps, so there have been a lot of cost-cutting ideas that have sprung up throughout the years; Taurus radiator and fan, C4 Vette aluminum driveshaft, factory and aftermarket exhaust manifolds and headers, etc.