Try this. It fixes the C compiler problem you had and also some others about different paths for the SDK and GCC as well as allowing you to build all three platforms now.
mkdir -p build
rm -rf build/* #*/
function build_lame()
{
make distclean
./configure \
CFLAGS="-isysroot /Applications/Xcode.app/Contents/Developer/Platforms/${SDK}.platform/Developer/SDKs/${SDK}${SDK_VERSION}.sdk" \
CC="/Applications/Xcode.app/Contents/Developer/usr/bin/gcc -arch ${PLATFORM} -miphoneos-version-min=7.0" \
--prefix="/Users/$USER/Desktop/twolame" \
--host="arm-apple-darwin9" \
--disable-shared \
--enable-static \
make
cp "libtwolame/.libs/libtwolame.a" "build/libtwolame-${PLATFORM}.a"
}
SDK_VERSION=7.0
PLATFORM="i386"
SDK="iPhoneSimulator"
build_lame
PLATFORM="armv7"
SDK="iPhoneOS"
build_lame
PLATFORM="armv7s"
SDK="iPhoneOS"
build_lame
lipo -create build