Let me throw in some thoughts about 16 from the perspective of someone who plays it every week....and admittedly, I'm biased. I think that it's a great hole, though arguably not the best hole on the course.
First, it's a difficult and unique hole...and there's nothing wrong with having a hole that's very challenging and a little different. I like courses that have holes like this toward the end of the round, they create some anticipation (and apprehension) that builds during the round, ie, I've got a good round going, but anything can happen on 16. You wouldn't want more than one hole like this on a course, but one hole like this is pretty cool.
Second, though it's a very difficult green, remember that it's a short hole, under 385, with good drives that bounce downhill. It's not unusual for a good golfer to hit 3 wood off the tee and still have a wedge or short iron in. And unlike the "typical" short par 4, the green on 16 is huge. Given these facts, it's not unreasonable to challenge the good golfer with a tough green, and to expect the good golfer to put the ball not just on the green, but in the right place on the green. If you hit the approach to the proper tier, you're rewarded here with a relatively flat putt -- I see a number of birdies on this hole.
Putting on this hole depends a lot on where the pin is located. The easiest position is middle center/right. A putt from the lower tier to this pin is actually easy...you simply hit it hard, and you have a giant backboard to bring your putt back to the hole. True, a putt from the upper tier to the middle tier is brutal, but anyone that hits a ball that far long and above the hole deserves what they get....rather than a hazard or awful rough, they get an almost impossible putt...but just because it's a putt doesn't make the hole silly, it makes it different (and in my view brilliant)...MacKenzie has created a green that uses sections of a green as a hazard, an effective "moving" hazard depending on the pin position.
The most common pin position is the back tier. It's a very long section of green with lots of pin positions, and as a tier it's almost as large as some greens you'll find on short par 4s on other courses. It's fairly flat, and there's room to miss right and a bit long. If you miss it short, it will roll all the way down, leaving a nasty uphill putt. But if you think about it, missing the green short on a short par 4 often means death by nasty bunker or hazard, where getting up and down is nearly impossible....so here, the punishment is arguably less severe...severe punishment by difficult putt, where it's difficult to get "up and down." It's not necessarily unfair (depending on green speed).
In addition to the above two tiers, there's a middle left pin position that's nasty, really almost a fourth tier between the top and middle tiers, that adds another dimension. It's difficult to keep an approach shot on this small shelf, which forces golfers choosing to play conservative to either aim for the top shelf, or the middle center/right shelf, and trying to two putt.
Either way, it's tough. I agree, for a 25 handicapper, it could be rough...but I played the course recently with a 30 handicapper who's new to the game, he shot 124, bogeyed 16 with a back pin, and had a great time.
And Tom H. is right...green speed is a big issue, and it's a huge factor for playability on 16. It's certainly a better hole, more playable with more pin positions, and more fair, with green speeds at 9 or 9.5. I think the club is doing the right thing by slowing the greens up and focusing on smooth over fast....but remember that Pasatiempo is an unusual club that caters to both a private membership and the public, which forces interesting choices about how to set up the course.
Rob