Although the optimizations are a small part of it, I like LFS more for it's ability to teach me a lot more than I currently know about Linux (which currently isn't very much)
Also, about optimization - I consider RAM usage part of optimization; currently, the Redhat 7.2 installation that I'm using to build my LFS system uses almost all of my 256MB of RAM with KDE+a few small apps. This is not good, and with LFS I will be able to optimize this aspect of system performance much more easily. With LFS, you choose to only include what you want. With Redhat (and others), you choose what you want to exclude - a different philosophy, and a very inefficient one if you don't want 75% of the things that they think you need.