Anyone who has a pat answer for a performance question is wrong :-) The appropriate answer is always 'it depends.' Performance tuning is best done via measure, change one variable, repeat.
DB2 for i shouldn't even notice if someone executes a 1,000 row SELECT statement. Take Benny's suggestion and run one while the IBM i side watch. If they want a hint, use WRKACTJOB and sort on the Int column. That represents the interactive response time. I'd guess that the query will be complete before they have time to notice that it was active.
If that seems unacceptable to the management, then perhaps offer to test it before or after hours, where it can't possibly impact interactive performance.
As an aside, the RPG guys can create Excel spreadsheets on the fly too. Scott Klement published some RPG wrappers over the Java POI/HSSF classes. Also, Giovanni Perrotti at Easy400.net has some examples of providing an Excel spreadsheet from a web page.