I don't think so. I think the LC competes more directly with the lighter 9mm pistol caliber carbine variants out there, and even .22 WMR carbines like the KelTec CMR30. Clearly the LC is a less expensive alternative than the FN PS90, as well.
If we can overlook the price/availability of the cartridge for a moment, I see the LC exactly as the PDW that the cartridge it fires was designed to be. Shortish range, light recoil, reasonable capacity, in a short package considering the 16" barrel.
I can see the LC as very good home defense carbine for those averse to recoil. I can also see the LC as a so called "backpack/survival" carbine. A 16" barreled LC with a few loaded magazines should be a lighter and more compact package than a 16" barreled AR with the same number of equal capacity loaded magazines.
Plus, putting a folding stock on an AR certainly increases the price of that AR, while the LC has a folding stock included. Looks like the LC can fire with the stock folded, too.
Of course, I'm leaving out pistol ARs with arm braces here, which would be blasty little guns if in 5.56 with no suppressor.