There is no evidence that Arimathea was an actual city or location. Doesn that cast doubt upon the historicity of Joseph of Arimathea and hence the relocation hypothesis?
I am agnostic regarding Arimathea; the existence of Arimathea is hardly essential to the historicity of Joseph. Even if we conclude that Arimathea never existed, it could still be the case that the story is based upon a real historical Joseph and that Arimathea is a legendary detail added on later. This seems like a real possibility to me, since the primary reason for positing a historical Joseph has to do with his role in the burial, not where he was from.