This is really still the big difference. If you stop both lenses down into the f/8-f/11 range, the performance is fairly similar. But, if you'll shoot in low light with the lens (ambient lighting for interior shots, for example, or outdoors at night), the f/2.8 is the better choice, budget permitting. Unlike many faster lenses, at 16/17mm the DoF with wide apertures is not as limiting (e.g. at 16mm f/2.8 focused at 10 feet, everything from 5 feet to infinity is within the DoF).
If the IS is decent, it might more than make up for the difference.
And for those wishing this lens was longer (if it comes out): Crop!
This would be an ideal walkaround for me, especially when I get a 5D3. More megapixels means cropping the hell out of the images. Better ISO means this is as good as a 2.8 is today. *fingers crossed*