Powerful Build is worth +1 LA just as large size is, ya you don't get reach, but you also don't get the penalties to attack and AC, and you retain all the other benefits such as +4 to bull rush, grapple, etc.... It's a bit on the low end of LA +1 though so you can still have things like slightly unbalanced stats and keep it LA +1.
A good LA +1 template would be +4 str, -2 dex, powerful build, and maybe something else small.
A good LA +1 template would be +4 str, -2 dex, powerful build, and maybe something else small.