Arnold was exactly who they needed for a movie from that era. Predator is not some art film with deep themes. It's an 80's action film that had fun characters and great one-liners. Most action films from that era are the exact same. Of course the director would later make the first Die Hard which I just call a great film versus a great action movie.
Stallone would have been good, and probably would have gave a better acting performance but I think Arnold was perfect in the role. The movie still entertains me to this day.