Arsenal aren't suddenly going to be top 4 again with any manager, without significant investment that is and clearing out of the deadwood.
A new manager isn't going to just wave a magic wand and make the clodhoppers turn into world stars.
Arteta would be a good choice and could help a 2-3 year turnaround of the team, but will the fans put up with not having instant success? That unfortunately is the way of football now. Alex Ferguson would have been sacked long before he ever became the legend he was if he was starting out in today's climate.
It's a shame as a team needs time to rebuild with the same manager in place. Which I'm not sure will happen anymore.
I agree that Arsenal are unlikely to be in contention for a CL with their current squad even if a Guardiola, Allegri, Simeone, etc took over and didn't have cash to spend on at least three or four top players.
Regardless of Arteta's coaching experience, I don't think he has the managerial credentials to be confident enough to say that he is a
good choice. He could be of course. But so could a number of managers with actual experience and they'd presumably stand a greater chance of achieving a CL spot than a novice. Consistency at getting results at the top level is something managers have difficulties maintaining, especially ones who are new to it or caretaker managers. Basically Arsenal stand a better chance of short and long-term success with an experienced and successful manager at the helm, e.g. Allegri or Simeone. Arteta having no successes or failures to compare against those types of managers doesn't mean that he stands an equal chance of achieving the same as them. Ex players like Roy Keane, Ince, Tony Adams, to name just a few, in theory, should have been top managers given their pedigree and playing careers but most of them ended up failing or settling for mediocrity. On the other side of the fence a small group of top ex players have made their mark on management (Pep, Diego Simeone, Zidane).
From the looks of it Arsenal are putting in place an infrastructure that should help Arteta adjust to management. Experienced people like the Dortmund scout, the ex Barca DoF, a new medical team should really help him out with the complexities and demands of modern management.
How long has he been away from Arsenal? A few years? Presumably some of the same faces are still hanging around the Arsenal changing room. Depending on his previous relationship with those players the need for authority and respect could be a difficult one to elicit from them. But I think I'm right in saying he was their captain for a while so perhaps that's already a given.
I just don't think his appointment can be called anything other than a gamble (I felt the same way about Giggs when there was talk of him getting anywhere near the Man Utd job) with a lower prospect of success than other managers who may have been up for the job.
Edit - Assuming Arteta wasn't their first choice (he might have been) I wonder if guys like Allegri were put off by the prospect of working with a hobbled budget coupled with the demands of the directors and supporters.