I finally got so fed up with not having him that I just reverted to the last save I had with him still as my companion (it was like 20 hours back and I had to do vault 34 again, bleah). It took a REALLY long time to get his quest. It happened after I'd completed the Yes Man's second to last quest, as I was walking out of the Lucky 38. Arcade stopped me and initiated the dialogue on his own, I didn't have to ask him anything. I think you have to be far enough in the endgame to have locked yourself to one faction, and you have to have "failed" all the Legion quests by A. choosing any side that's not them and B. being vilified by them. His quest was literally the last thing I did before heading out to Hoover Dam for the final bit, and it happened later in the questline than what's indicated on the wiki, so I think they might be underestimating how far along you have to be before he'll give it to you.
Then again, my game could just be glitched. Or yours could be glitched. Or they're both glitched. At this point I wouldn't be surprised. But yeah, don't give up hope unless the game's actually ENDED without him initiating the quest.
Sorry to hear you couldn't get it working :/ I managed to get the quest in the end, I was on The House Always Wins, VII by the time he talked to me (although I guess that makes sense since the whole point of the quest is to recruit people for the battle). I'm Neutral with NCR and Vilified with Legion, so I think that might affect the quest too.
So I managed to get the quest, finally, and after the quest has concluded and Arcade returns to the bunker to give you his family armour, the dialogue to recruit him is no longer present...exactly the same bug I experienced in the OP.
I am thinking at this point I must have done something to upset someone at Obsidian?