While I can understand the intent, but I still maintain that it was the wrong decision based on the car they made. (As compared to the car they intended.)
If they wanted a lightweight 4-cylinder car, why didn't they make one? My Redline weighed ~3200 lbs. My Camaro 2SS weighs 3800, and that's with the porky 80lb seats and 50 lb wheels.
FYI, a base Corvette from the same model year as my Sky was ~3400 lbs. Pick any of the smaller displacement aluminum truck engines, so the vette's place on top is safe. Throw this in place of the LNF, which made the 290 with the GM tune. Tune it for 350-375 HP, so there's not a significant increase it heat to deal with. No intercooler, so if you do need more radiator size you can make it up there. You're talking a marginal increase it weight over an LNF with it's turbo and piping.
You can argue the LNF and LE5 still weigh less, but my argument is the weight savings isn't enough to justify using them when an LS fits so easily. If you'd designed the platform to be lighter in a way that precluded an LS from fitting in the engine bay I'd get it.
Fuel economy isn't even an argument. My LNF powered Kappa got 18-19 around town. The Camaro gets 20-21.