It's that flexibility which allows people to create arch installs with a very low memory footprint, or crazy-fast boot times, or bleeding-edge software.
Another part of Arch's allure is its overall simplicity: it is possible to learn how to administer the entire system within a day or two. The wiki makes it easy to read up and learn about how to configure a portion of your system should you want to, and the installation covers of your system covers most of the fundamentals anyway!
Pacman (and pacaur!) are great, and having the latest packages is also great (I've only needed to reinstall my Arch setup once in the 5+ years I've used it, by the way), but these days we have Docker and VMs which are fast and usable enough on commodity hardware that they can be used to safely compile and run custom packages if you really need them, so it's not quite as cool as it was back then, but having it integrated into your package management system (and getting updates from AUR maintainers on packages based on git clones!) is still very useful.