Lenses aside, the bodies you are comparing is like apple and oranges, a more suitable comparision would be the E-500 with D50. Features and price wise would be similar. Personally, i feel that between the 2 bodies, i would get the E-500. (Which i did!)
As for lenses, while Oly have less lens, please ask yourself, how many lens do you need ? If you are just taking photography as a hobby, you wouldnt need more then 4 lens i believe. The Oly setup of 11-22mm, 14-54mm (optional), 50mm F2 Macro & 50-200mm would suit almost all but the most demanding needs. Cost of Oly lenses are a deciding factor in this case as the lens i just stated, cost an average of $800 - 1.4k each. Of course, oly does have a consumer range of lens too - 14-45mm, 35mm macro, 40-150mm or even the all in 1 18-180mm. Those lens range between 300 - 700.
Oly limited range of lenses is a blessing for me actually. Oly users seldom face the trouble of deciding which lenses has problems with QC, softness etc etc. Every of ZD lens are simply amazing. even for the kit lenses, it had been stated that it already better then what the N/C kits have.