This theads a little old, but not too old. I tow regularly and have a short wheelbase LT TB with a 5.3.
At the pump, it's not ideal. But the power is really nice. I also upgraded to stiffer front springs, and EXT rear springs, so its a stiffer ride all around. And it tows great. Most of my towing is light towing and I don't even notice the trailer. Including up to my boat, which is a 1900 lb load. If the boat trailer tires are fully inflated..... what boat?
I've towed heavier stuff too. A bunch of loads of asphalt and concrete this past fall, probably in the neighborhood of 3000 lbs. Handled it like a champ, on road, and on the unpaved roads in the quarry i was dumping at.
I also rented a 50' lift trailer once. It was 5000 lb and had its own trailer brakes. Stopped on a dime but that was the only time towing that I ever really felt sluggish. But I more than doubled my weight so thats to be expected.
All my other trucks were S10's with 4.3's so compared to that, this v8 is another world. I always think about this one particularly hill on i93 in massachusetts. I've towed my 1900 lb boat up that hill many times and I'd always end up doing about 45 mph by the time I got to the top. These days I tow that boat in the trailblazer and I'm usually in the left lane and accelerating/passing cars on my way to the top. The difference is DRAMATIC, much more than you'd think just looking at all the numbers on paper. But you weren't comparing to a 4.3 so that's not really relevant.
So just to reiterate, even 8 years ago when I bought mine, 5.3's are hard to find, especially in short wheelbase. But they're super useful, practical trucks that are excelent towers. And I find the interiors very comfortable, not cramped at all.