Excellent posts, Matt and Eric. I think the layup shot is what makes the hole interesting. Even with a good tee shot, the golfer is forced to play a long layup shot rather than the typical 6 or 7 iron followed by a wedge. It takes a well-played layup to leave a fairly easy approach. That's no guarantee on the hole.
For the tournament, it might be interesting to move the tee up once in a while to entice a few pros to give it a go in two. But for the members and guests, I find 16 to be plenty interesting/challenging as is.