17500 seems a little small for major league aspirations though. The only NBA arena smaller is in sacremento, and i think the prudential center is the smallest NHL one at 176xx.
Venue (City) - NHL/NBA capacity
Prudential Center (New Jersey) - 17,625/18,500
Jobing.com Arena (Phoenix) - 17,125/18,300
TD Banknorth Garden (Boston) - 17,565/18,624
HP Pavilion (San Jose) - 17,562/18,549
Bridgestone Arena (Nashville) - 17,113/19,395
The smallest arena in the NHL is Nassau VMC (16,250). Rexall (16,839) is the only other one under 17,000.
There is precedent for an arena of that size, and considering the market (and the extensive competition for entertainment dollars) it's probably pretty reasonable; besides, for a multi-purpose arena, that figure is likely the seating capacity for hockey, which means it'll hold 18k+ for basketball.
I wouldn't be totally opposed to a team in Las Vegas, but I think there are other U.S. markets the NHL should target first, namely Houston and Portland.