Sony Xperia Arc is an excellent phone. The phone is of great build, really thin design (easy pocket-ability), Good screen size, Excellent display powered by bravia engine Led backlit LCD (still not up to par in comparison with Super Amoled or Plus), Excellent Camera and video with clear images.
But the main reason why it is not popular (IMHO):
1) The price of it is 26k. It is a bad pricing for a phone that is late to the party. Looking at the price, for 3k more you get Samsung Galaxy S2 or HTC Sensation. Honestly given the options in the market with other handsets that provide same or better performance than Sony Xperia Arc while priced lower. People tend to overlook it for better ones. The handsets that are on par or better than Xperia Arc - Nexus S - 19k, Samsung Galaxy S - 20k, Optimus 2X dual core - 24k and the list goes on and on. Now some models might be missing some features. But for the price it is purely not worth to invest. After all despite the camera/multimedia/display it still possess single core processor.
2) Sony's reputation of updates. While sony finally decided to upgrade X10 to 2.3.3. But that was only after outbursts. Else it would have stayed with 2.1 eclair. It has been marketing strategy for lots of manufacturers who, on purpose, do not upgrade their old models in order to push out the new ones. So expect Arc to be in that list.
But given all the points above. It is absolutely only recommended for people who are die hard sony fans. Or someone who only trust sony. But given the options in the market, you can invest on better one. For the price of Xperia Arc, you can buy dual core and future proof yourself.
One important thing, I love Xperia Arc and not bashing it in anyway. Its innovative design and also good looking. For the price, I do not justify buying it or investing on it.