You are referring to the host type set on the DS3524 and not to Storage Array Type configured on the ESXi hosts (you can see this in the same place you set the Path Selection Policy).
From ESXi 5.0 U1 DS3524 should default to using a Storage Array Type of VMW_SATP_ALUA instead of VMW_SATP_LSI and the recommended Path Selection Policy would be Round Robin.
I haven't got access to a DS3500 at the moment to test put you should be able to set the ESXi 5.1 host to use ALUA by changing the host type on the DS3524 to VMwareTPGSALUA and rebooting the host.
Hope that helps.