locale-gen does not work in LXC container

Running locale-gen under a LXC container does not work..running it under a non-LXC container works.

Steps to repoduce:
1. For convience, run "lxc-create -t ubuntu-cloud -n locale-test"
2. Start you instance, "lxc-create -n locale-test"
3. Login in as "ubuntu", password "ubuntu"
4. Run "sudo locale-gen -

ubuntu@t1:/tmp$ sudo locale-gen en_US.UTF-8
Generating locales...
  en_US.UTF-8... cannot read archive header: No such file or directory
failed
Generation complete.

Looking at an strace ( strace -f -ff -o /tmp/test locale-gen en_US-UTF-8) yields:
open("/usr/lib/locale/locale-archive.TcQNQv", O_RDWR|O_CREAT|O_EXCL, 0600) = 3
write(3, "\t\1\2\336\0\0\0\0008\0\0\0\0\0\0\0\213\3\0\0\274*\0\0\0\0\0\0L\35\0\0"..., 56) = 56
ftruncate(3, 103860) = 0
mmap(NULL, 536870912, PROT_NONE, MAP_SHARED, 3, 0) = 0x7f79fcfae000
mmap(0x7f79fcfae000, 103860, PROT_READ|PROT_WRITE, MAP_SHARED|MAP_FIXED, 3, 0) = 0x7f79fcfae000
link("/usr/lib/locale/locale-archive.TcQNQv", "/usr/lib/locale/locale-archive") = 0
unlink("/usr/lib/locale/locale-archive.TcQNQv") = 0
fchmod(3, 0644) = -1 ENOENT (No such file or directory)
unlink("/usr/lib/locale/locale-archive") = 0
write(2, "cannot change mode of new locale"..., 40) = 40
write(2, ": No such file or directory", 27) = 27
write(2, "\n", 1) = 1

ProblemType: Bug
DistroRelease: Ubuntu 12.04
Package: libc-bin 2.15-0ubuntu2
ProcVersionSignature: User Name 3.2.0-15.24-generic 3.2.5
Uname: Linux 3.2.0-15-generic x86_64
NonfreeKernelModules: veth pci_stub vboxpci vboxnetadp vboxnetflt vboxdrv hdaps ipt_MASQUERADE iptable_nat nf_nat nf_conntrack_ipv4 nf_conntrack nf_defrag_ipv4 ip_tables x_tables bridge stp kvm_intel kvm rfcomm bnep bluetooth deflate zlib_deflate ctr twofish_generic twofish_x86_64_3way twofish_x86_64 twofish_common camellia serpent parport_pc blowfish_generic blowfish_x86_64 blowfish_common ppdev cast5 des_generic xcbc rmd160 sha512_generic crypto_null af_key binfmt_misc dm_crypt nvidia snd_hda_codec_hdmi arc4 snd_hda_codec_conexant snd_hda_intel uvcvideo joydev videodev snd_hda_codec hid_logitech_dj v4l2_compat_ioctl32 thinkpad_acpi dm_multipath iwlwifi snd_seq_midi snd_rawmidi snd_hwdep snd_seq_midi_event mei psmouse mac80211 serio_raw snd_seq snd_pcm snd_seq_device snd_timer snd_page_alloc mac_hid snd cfg80211 soundcore wmi nvram lp parport tp_smapi thinkpad_ec dm_raid45 xor dm_mirror dm_region_hash dm_log vesafb usbhid hid sdhci_pci sdhci e1000e video zram usb_storage
ApportVersion: 1.91-0ubuntu1
Architecture: amd64
Date: Mon Feb 13 21:24:43 2012
Dependencies:

ProcEnviron: SHELL=/bin/bash
SourcePackage: eglibc
UpgradeStatus: No upgrade log present (probably fresh install)