Need to assess the implications of this in terms of potential backwards compatibility and ARIA/accessibility concerns.

r46094: added aria-labelledby attribute to <button> element in ace:checkboxButton and ace:radioButton, and also corrected the value of the 'for' attribute of the label to point to the <button> element itself and not the main container; added aria-labelledby attribute to ace:slider via client side and to ace:themeSelect; removed rendering of aria-labelledby and aria-describedby attributes in ace:linkButton and ace:pushButton, which were rendering incorrect values: they were rendering label texts instead of an id of a <label> element.

This improvement of using <label> elements had already been done under ICE-10721. However, all components with label attributes were surveyed and assessed in regards to ARIA and accessibility. The components mentioned above weren't rendering aria-labelledby or weren't doing so correctly. The following components were already rendering aria-labelledby correctly: ace:autoCompleteEntry, ace:comboBox, ace:dateTimeEntry, ace:maskedEntry, ace:selectMenu, ace:simpleSelectOneMenu, ace:textEntry, and ace:textAreaEntry.

Verified ICEfaces 4 trunk r46094. Tomcat 7, IE 11, FF 34, Chrome 45.

<label> is rendering properly now, but some parent <span> elements are added to the rendered markup which means we still can't reliably use the label/labelPosition inside an h:panelGrid due to column counting. Although when panelGrid is processed in the rendering lifecycle I don't know if we'll ever be able to properly use the label approach.
Ideally we want to be able to say:

<h:panelGrid columns="3">
<ace:someComp id="test" label="Test"/>
<ace:message for="test"/>
</h:panelGrid>

And have it render out as 3 distinct columns, the first being <label>, the second our component, and the third an error message.

Meanwhile for the span wrapping issue this JSF code...
<h:panelGrid columns="2">
<ace:textEntry id="itemNIn" value="#

"
required="true" maxlength="20"
autocapitalize="true" autocorrect="true"
placeholder="Enter item name"
requiredIndicator="*"
validator="UniqueItemNameValidator"
label="Item Name:" labelPosition="left">
<f:validateLength minimum="3" maximum="20"/>
</ace:textEntry>
<ace:message for="itemNIn"/>
</h:panelGrid>

Renders to this HTML...
<table>
<tbody>
<tr>
<td>
<span id="p:itemNIn">
<span>
<label id="label_p:itemNIn" for="p:itemNIn_input" class="ui-input-label ui-input-label-left">Item Name:</label><input type="text" value="Brocolli" role="textbox" placeholder="Enter item name" onfocus="ice.ace.lazy('TextEntry',['p:itemNIn',{'autoTab':false,'secret':false,'originalType':'text','indicatorPosition':'right','labelPosition':'left','immediate':false,'behaviors':{'change':

}}]);" name="p:itemNIn_input" maxlength="20" id="p:itemNIn_input" data-elementupdate="p:itemNIn" class="ui-inputfield ui-textentry ui-widget ui-state-default ui-corner-all ui-state-required" autocorrect="true" autocapitalize="true" aria-required="true" aria-labelledby="label_p:itemNIn"><span class="ui-required-indicator ui-required-indicator-right">*</span></span>
</span>
</td>
<td>
NEXT CONTENT
</td>
</tr>
</tbody>
</table>

The important part being the <span id="p:itemNIn"> and basic <span> wrapping the label and input.