These types of clauses go against Australian consumer law. A dead/bright pixel would be considered at least a minor failure and would need to be remedied, regardless of what the manufacturer warranty claims. I've had at least one phone and a computer monitor or two replaced under Australian Consumer Law because of pixel faults.
I don't think it does go against the ACL. The ACL only states that it be "acceptable quality" which means "the goods must be safe, lasting, have no faults, look acceptable and do all the things someone would normally expect them to do". If the manufacturer considers a certain number of dead pixels to be acceptable due to manufacturing variance and it is an industry wide practise then it will be considered normal and not a fault. You ultimately have to appeal to the manufacturer as you have for your replacements or take it to court if they refuse. The ACL by itself doesn't force them to do it.
There are a number of different parts to ACL which could be enacted in the case of dead pixels:
As you mentioned, "acceptable quality" includes being without fault -- Dead or stuck pixels is a fault of the LCD, regardless if the manufacturer thinks otherwise. If I go shopping for an LCD monitor or TV, I expect every pixel to function as intended. I'd be pretty annoyed if there was a bright pixel or two right in the middle of my display. Products must also "match any demonstration model or sample you asked for". If the floor model had dodgy pixels, then I knew what I was getting myself in for.
It's also not up to the manufacturer to determine what is "acceptable", that's ultimately up to a court to decide based on what a "reasonable person" would think. If I went and bought a monitor for $50, it's probably reasonable to accept that it will have quality issues or minor faults. However if I go and spend hundreds or thousands on a good quality product, it wouldn't be acceptable.
Also, if a retailer or manufacturer sold a product at a discounted price because of the fault and you were made aware of it, then ACL doesn't apply. I think any reasonable person would expect a brand new LCD off-the-shelf to be completely free of defects otherwise a replacement/refund is in order.
Manufacturers build the cost of returns (whether under ACL or not) into their products based on a pre-determined failure rate.