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I was just posting the 26" to 650B conversion as it's probably the best looking LHT there is on the net and everyone was bitching about 650b after Amy suggested it.
But re your point the 650b conversion on the 26" LHT fills up the clearances and looks better than a regular 26". Also I'd guess that the weight difference between the wheels would be small and you'd be able to source lighter road-like tyres in 650b. So all in all the wheel package would be lighter. Ultimately I'm sure you could end up with the same effective total wheel diameter using either 26" or 650b, so the benefit of having bigger wheels wouldn't apply, nor would the increased BB height.
But most importantly that bike looks good. (As I said unless you needed a tiny frame) I'd choose 700c anyway.
Oh and to all the 650b neigh sayers: