I guess I will answer my own question to provide info for any other Chowhound travelling to Lethbridge. Lethbridge is sadly, a culinary wasteland. Any local we asked about good restaurants mentioned all the mediocre chains out there. We had a terrible dinner at The Keg -- and all we saw driving around were fastfood places (The KFC on Mayor Magrath had a full parking lot). I suspect anyone living there must cook a lot at home.
On the upside, a hidden gem is the Lethbridge Casino. Yes, I'm typing right, the casino. It's smoke free, and once you run the gauntlet of blinking lights and dinging and whirly noises, you will be pleasantly surprised at the grill. We had a Spaghetti soup -- Mr. S ordered it as almost a joke to see what we would get. Wonderful tomato broth, chunks of beef, and you guessed it - strands of broken spaghetti amongst chunks of carrot, potatoes and celery. It was tomato-y down home goodness that grandma would make.
I had the clubhouse, which was very fresh and delicious, fries were really good. Mr. S had the beef dip, but it was real roasted beef, with real au jus for dipping (not the oversalted beef consomme out of a can) plus nicely cooked veggies and his Spaghetti Soup.
The menu there is quite basic and simple, plus they have daily specials. A must-try for anyone heading out to Lethbridge. And ... they're open until 3:00 am!!!
I totally disagree with your statement that Lethbridge is "a culinary wasteland". I grew up in Lethbridge and return to visit frequently, and coming from a family of extreme foodies I can promise you that there are indeed some very good choices (if you venture outside the mediocre chains like the Keg, Cheesecake Cafe, and the like). They are locally owned and operated - in fact you'll often be served by the chef owners or at least see these individuals bustling around the establishments.
I'd suggest the following: Coco Pazzo (a family owned Italian place on 3rd Ave that makes its own wood fired thin crust pizza and fresh pasta); 360 near Galt Gardens and Park Place Mall (a more contemporary take on Italian) and the panini/gelato place next door (owned by the same Italian family that owns and runs 360 and Coco Pazzo); Miros near Galt Gardens (I'm not sure how to describe this place other than to say that it's got a small well executed menu and is chef owned and operated); Plum down the street from Galt Gardens (a great little lounge/restaurant with amazing creative fresh food, owned and operated by another local businessman and with chefs from the LCC's culinary program); O-Sho Japanese Restaurant near the Courthouse; and Lighthouse Japanese Restaurant. There are also several good Chinese places and Vietnamese places that are not chains and serve food just as good as some of my favourite places here in Calgary.
Hopefully you'll try some of these places next time you're in Lethbridge!