In quantum mechanics, a measurement necessarily picks out a certain basis. A given measurement corresponds to a certain hermitian operator, and the observed outcomes of that measurement correspond to eigenstates of the corresponding operator. So the natural basis for that measurement/operator is the eigenbasis.
I think what you are concerned with is that in certain problems we would like to classify statistical quantum states (ones described by a density matrix) as either a "pure state" or a "mixed state." This is a quantum statistical mechanics topic. However, whether something is a pure state or a mixed state depends on the basis, so you might object to the classification as arbitrary. But in those cases, one might argue that the physical scenario picks out the preferred basis; e.g. in a system with energy conservation, it's typical that the "preferred basis" is the energy eigenbasis. So this is a different sort of problem.
In your analogy where an "observer's state" starts in some initially neutral state and evolves into states corresponding to the system's state, you are implicitly saying that the observer is choosing to measure along the basis that the system's state is defined with respect to. If the observer was making a different measurement, we would have change the basis with respect to which we write down the system's state, if we wanted to be consistent with the sort of notation Von Neumann was using when he created this model of the measurement process. But we can easily beef up Von Neumann's notation to be more general. Here's a little example:
Let's say we have a spin 1/2 system, and we're only concerned with its spin state. Its state lives in a two-dimensional Hilbert space spanned by |up>n and |down>n, where n denotes an arbitrary axis.
Now let's once and for all define our x, y, and z axes--no more redefining our axes from now on. Let's call our system's state |ψ>, and assume the system is initially in the state |up>x, an eigenstate of measurement along the x-axis. Here is a fact you can verify from any QM textbook:
|ψ> = |up>x = 1/√2 (|up>z+|down>z)
So if your observer is measuring along the z-axis, her basis states are |neutral>, |"I see up along z!">, |"I see down along z!">. Now a measurement of |ψ> would look like this more complicated process
|neutral>|ψ> = |neutral>|up>x = |neutral>1/√2 (|up>z+|down>z) --> 1/√2 (|"I see up along z!">|up>z+ |"I see down along z!">|down>z)
So the measurement "picks" the z-basis representation of |ψ>